Correlation Between Tungsten West and Nordic Semiconductor
Can any of the company-specific risk be diversified away by investing in both Tungsten West 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 Tungsten West and Nordic Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tungsten West PLC and Nordic Semiconductor ASA, you can compare the effects of market volatilities on Tungsten West 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 Tungsten West with a short position of Nordic Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tungsten West and Nordic Semiconductor.
Diversification Opportunities for Tungsten West and Nordic Semiconductor
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Tungsten and Nordic is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Tungsten West PLC 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 Tungsten West 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 Tungsten West PLC 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 Tungsten West i.e., Tungsten West and Nordic Semiconductor go up and down completely randomly.
Pair Corralation between Tungsten West and Nordic Semiconductor
Assuming the 90 days trading horizon Tungsten West PLC is expected to generate 2.43 times more return on investment than Nordic Semiconductor. However, Tungsten West is 2.43 times more volatile than Nordic Semiconductor ASA. It trades about 0.03 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 350.00 in Tungsten West PLC on September 2, 2024 and sell it today you would lose (50.00) from holding Tungsten West PLC or give up 14.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tungsten West PLC vs. Nordic Semiconductor ASA
Performance |
| Timeline |
| Tungsten West PLC |
| Nordic Semiconductor ASA |
Tungsten West and Nordic Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tungsten West and Nordic Semiconductor
The main advantage of trading using opposite Tungsten West and Nordic Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tungsten West 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.| Tungsten West vs. Verizon Communications | Tungsten West vs. Fortune Brands Home | Tungsten West vs. Infrastrutture Wireless Italiane | Tungsten West vs. Home Depot |
| Nordic Semiconductor vs. Sparebank 1 SR | Nordic Semiconductor vs. Taiwan Semiconductor Manufacturing | Nordic Semiconductor vs. Synchrony Financial | Nordic Semiconductor vs. Coor Service Management |
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 Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
Other Complementary Tools
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios |