Correlation Between Seraphim Space and Nordic Semiconductor
Can any of the company-specific risk be diversified away by investing in both Seraphim Space 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 Seraphim Space and Nordic Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Seraphim Space Investment and Nordic Semiconductor ASA, you can compare the effects of market volatilities on Seraphim Space 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 Seraphim Space with a short position of Nordic Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seraphim Space and Nordic Semiconductor.
Diversification Opportunities for Seraphim Space and Nordic Semiconductor
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Seraphim and Nordic is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Seraphim Space Investment 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 Seraphim Space 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 Seraphim Space Investment 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 Seraphim Space i.e., Seraphim Space and Nordic Semiconductor go up and down completely randomly.
Pair Corralation between Seraphim Space and Nordic Semiconductor
Assuming the 90 days trading horizon Seraphim Space Investment is expected to under-perform the Nordic Semiconductor. But the stock apears to be less risky and, when comparing its historical volatility, Seraphim Space Investment is 1.09 times less risky than Nordic Semiconductor. The stock trades about -0.14 of its potential returns per unit of risk. The Nordic Semiconductor ASA is currently generating about 0.51 of returns per unit of risk over similar time horizon. If you would invest 9,929 in Nordic Semiconductor ASA on October 25, 2024 and sell it today you would earn a total of 2,106 from holding Nordic Semiconductor ASA or generate 21.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Seraphim Space Investment vs. Nordic Semiconductor ASA
Performance |
| Timeline |
| Seraphim Space Investment |
| Nordic Semiconductor ASA |
Seraphim Space and Nordic Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Seraphim Space and Nordic Semiconductor
The main advantage of trading using opposite Seraphim Space and Nordic Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seraphim Space 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.| Seraphim Space vs. Accesso Technology Group | Seraphim Space vs. Take Two Interactive Software | Seraphim Space vs. Creo Medical Group | Seraphim Space vs. International Biotechnology Trust |
| Nordic Semiconductor vs. Learning Technologies Group | Nordic Semiconductor vs. Coor Service Management | Nordic Semiconductor vs. MTI Wireless Edge | Nordic Semiconductor vs. Allianz Technology Trust |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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