Correlation Between NYSE Composite and Nordic Semiconductor
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Nordic Semiconductor at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining NYSE Composite and Nordic Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Nordic Semiconductor ASA, you can compare the effects of market volatilities on NYSE Composite and Nordic Semiconductor and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in NYSE Composite with a short position of Nordic Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Nordic Semiconductor.
Diversification Opportunities for NYSE Composite and Nordic Semiconductor
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between NYSE and Nordic is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Nordic Semiconductor ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nordic Semiconductor ASA and NYSE Composite is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on NYSE Composite are associated (or correlated) with Nordic Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nordic Semiconductor ASA has no effect on the direction of NYSE Composite i.e., NYSE Composite and Nordic Semiconductor go up and down completely randomly.
Pair Corralation between NYSE Composite and Nordic Semiconductor
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.17 times more return on investment than Nordic Semiconductor. However, NYSE Composite is 5.9 times less risky than Nordic Semiconductor. It trades about 0.08 of its potential returns per unit of risk. Nordic Semiconductor ASA is currently generating about -0.01 per unit of risk. If you would invest 1,547,479 in NYSE Composite on August 26, 2024 and sell it today you would earn a total of 464,866 from holding NYSE Composite or generate 30.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Nordic Semiconductor ASA
Performance |
| Timeline |
NYSE Composite and Nordic Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Nordic Semiconductor ASA
Pair trading matchups for Nordic Semiconductor
Pair Trading with NYSE Composite and Nordic Semiconductor
The main advantage of trading using opposite NYSE Composite and Nordic Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Nordic Semiconductor can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Nordic Semiconductor will offset losses from the drop in Nordic Semiconductor's long position.| NYSE Composite vs. Grocery Outlet Holding | NYSE Composite vs. Tencent Music Entertainment | NYSE Composite vs. SunLink Health Systems | NYSE Composite vs. Getty Realty |
| Nordic Semiconductor vs. Nordic Semiconductor ASA | Nordic Semiconductor vs. STMicroelectronics NV | Nordic Semiconductor vs. Rohm Co Ltd | Nordic Semiconductor vs. Asm Pacific Technology |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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