Correlation Between Simon Property and Nordic Semiconductor
Can any of the company-specific risk be diversified away by investing in both Simon Property 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 Simon Property and Nordic Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Simon Property Group and Nordic Semiconductor ASA, you can compare the effects of market volatilities on Simon Property 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 Simon Property with a short position of Nordic Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Simon Property and Nordic Semiconductor.
Diversification Opportunities for Simon Property and Nordic Semiconductor
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Simon and Nordic is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Simon Property Group 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 Simon Property 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 Simon Property Group 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 Simon Property i.e., Simon Property and Nordic Semiconductor go up and down completely randomly.
Pair Corralation between Simon Property and Nordic Semiconductor
Considering the 90-day investment horizon Simon Property is expected to generate 2.16 times less return on investment than Nordic Semiconductor. But when comparing it to its historical volatility, Simon Property Group is 2.96 times less risky than Nordic Semiconductor. It trades about 0.19 of its potential returns per unit of risk. Nordic Semiconductor ASA is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 905.00 in Nordic Semiconductor ASA on August 28, 2024 and sell it today you would earn a total of 81.00 from holding Nordic Semiconductor ASA or generate 8.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Simon Property Group vs. Nordic Semiconductor ASA
Performance |
| Timeline |
| Simon Property Group |
| Nordic Semiconductor ASA |
Simon Property and Nordic Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Simon Property and Nordic Semiconductor
The main advantage of trading using opposite Simon Property and Nordic Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Simon Property 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.| Simon Property vs. Federal Realty Investment | Simon Property vs. Agree Realty | Simon Property vs. National Retail Properties | Simon Property vs. Kimco 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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