Correlation Between Wallenius Wilhelmsen and Nordic Semiconductor
Can any of the company-specific risk be diversified away by investing in both Wallenius Wilhelmsen 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 Wallenius Wilhelmsen and Nordic Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wallenius Wilhelmsen Logistics and Nordic Semiconductor ASA, you can compare the effects of market volatilities on Wallenius Wilhelmsen 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 Wallenius Wilhelmsen with a short position of Nordic Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wallenius Wilhelmsen and Nordic Semiconductor.
Diversification Opportunities for Wallenius Wilhelmsen and Nordic Semiconductor
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Wallenius and Nordic is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Wallenius Wilhelmsen Logistics 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 Wallenius Wilhelmsen 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 Wallenius Wilhelmsen Logistics 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 Wallenius Wilhelmsen i.e., Wallenius Wilhelmsen and Nordic Semiconductor go up and down completely randomly.
Pair Corralation between Wallenius Wilhelmsen and Nordic Semiconductor
Assuming the 90 days trading horizon Wallenius Wilhelmsen Logistics is expected to under-perform the Nordic Semiconductor. But the stock apears to be less risky and, when comparing its historical volatility, Wallenius Wilhelmsen Logistics is 1.16 times less risky than Nordic Semiconductor. The stock trades about -0.09 of its potential returns per unit of risk. The Nordic Semiconductor ASA is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 10,370 in Nordic Semiconductor ASA on November 4, 2024 and sell it today you would earn a total of 1,030 from holding Nordic Semiconductor ASA or generate 9.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wallenius Wilhelmsen Logistics vs. Nordic Semiconductor ASA
Performance |
| Timeline |
| Wallenius Wilhelmsen |
| Nordic Semiconductor ASA |
Wallenius Wilhelmsen and Nordic Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wallenius Wilhelmsen and Nordic Semiconductor
The main advantage of trading using opposite Wallenius Wilhelmsen and Nordic Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wallenius Wilhelmsen 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.| Wallenius Wilhelmsen vs. Hoegh Autoliners ASA | Wallenius Wilhelmsen vs. Stolt Nielsen Limited | Wallenius Wilhelmsen vs. MPC Container Ships | Wallenius Wilhelmsen vs. Aker BP ASA |
| Nordic Semiconductor vs. Storebrand ASA | Nordic Semiconductor vs. DnB ASA | Nordic Semiconductor vs. Telenor ASA | Nordic Semiconductor vs. Kongsberg Gruppen ASA |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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