Correlation Between SOLSTAD OFFSHORE and Nordic Semiconductor
Can any of the company-specific risk be diversified away by investing in both SOLSTAD OFFSHORE 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 SOLSTAD OFFSHORE and Nordic Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SOLSTAD OFFSHORE NK and Nordic Semiconductor ASA, you can compare the effects of market volatilities on SOLSTAD OFFSHORE 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 SOLSTAD OFFSHORE with a short position of Nordic Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of SOLSTAD OFFSHORE and Nordic Semiconductor.
Diversification Opportunities for SOLSTAD OFFSHORE and Nordic Semiconductor
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between SOLSTAD and Nordic is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding SOLSTAD OFFSHORE NK 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 SOLSTAD OFFSHORE 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 SOLSTAD OFFSHORE NK 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 SOLSTAD OFFSHORE i.e., SOLSTAD OFFSHORE and Nordic Semiconductor go up and down completely randomly.
Pair Corralation between SOLSTAD OFFSHORE and Nordic Semiconductor
Assuming the 90 days horizon SOLSTAD OFFSHORE NK is expected to generate 1.01 times more return on investment than Nordic Semiconductor. However, SOLSTAD OFFSHORE is 1.01 times more volatile than Nordic Semiconductor ASA. It trades about 0.01 of its potential returns per unit of risk. Nordic Semiconductor ASA is currently generating about -0.04 per unit of risk. If you would invest 342.00 in SOLSTAD OFFSHORE NK on November 7, 2024 and sell it today you would lose (2.00) from holding SOLSTAD OFFSHORE NK or give up 0.58% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SOLSTAD OFFSHORE NK vs. Nordic Semiconductor ASA
Performance |
| Timeline |
| SOLSTAD OFFSHORE |
| Nordic Semiconductor ASA |
SOLSTAD OFFSHORE and Nordic Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SOLSTAD OFFSHORE and Nordic Semiconductor
The main advantage of trading using opposite SOLSTAD OFFSHORE and Nordic Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SOLSTAD OFFSHORE 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.| SOLSTAD OFFSHORE vs. AP Mller | SOLSTAD OFFSHORE vs. AP Mller | SOLSTAD OFFSHORE vs. HAPAG LLOYD UNSPADR 12 | SOLSTAD OFFSHORE vs. ZIM Integrated Shipping |
| Nordic Semiconductor vs. NVIDIA | Nordic Semiconductor vs. NVIDIA | Nordic Semiconductor vs. Taiwan Semiconductor Manufacturing | Nordic Semiconductor vs. Texas Instruments Incorporated |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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