Correlation Between Wheaton Precious and Nordic Semiconductor
Can any of the company-specific risk be diversified away by investing in both Wheaton Precious 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 Wheaton Precious and Nordic Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wheaton Precious Metals and Nordic Semiconductor ASA, you can compare the effects of market volatilities on Wheaton Precious 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 Wheaton Precious with a short position of Nordic Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wheaton Precious and Nordic Semiconductor.
Diversification Opportunities for Wheaton Precious and Nordic Semiconductor
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Wheaton and Nordic is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Wheaton Precious Metals 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 Wheaton Precious 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 Wheaton Precious Metals 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 Wheaton Precious i.e., Wheaton Precious and Nordic Semiconductor go up and down completely randomly.
Pair Corralation between Wheaton Precious and Nordic Semiconductor
Assuming the 90 days trading horizon Wheaton Precious Metals is expected to generate 1.03 times more return on investment than Nordic Semiconductor. However, Wheaton Precious is 1.03 times more volatile than Nordic Semiconductor ASA. It trades about 0.14 of its potential returns per unit of risk. Nordic Semiconductor ASA is currently generating about 0.0 per unit of risk. If you would invest 457,535 in Wheaton Precious Metals on September 15, 2024 and sell it today you would earn a total of 24,465 from holding Wheaton Precious Metals or generate 5.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wheaton Precious Metals vs. Nordic Semiconductor ASA
Performance |
| Timeline |
| Wheaton Precious Metals |
| Nordic Semiconductor ASA |
Wheaton Precious and Nordic Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wheaton Precious and Nordic Semiconductor
The main advantage of trading using opposite Wheaton Precious and Nordic Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wheaton Precious 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.| Wheaton Precious vs. AIM ImmunoTech | Wheaton Precious vs. Gaming Realms plc | Wheaton Precious vs. Addtech | Wheaton Precious vs. Park Hotels Resorts |
| Nordic Semiconductor vs. Wheaton Precious Metals | Nordic Semiconductor vs. GoldMining | Nordic Semiconductor vs. Veolia Environnement VE | Nordic Semiconductor vs. Panther Metals PLC |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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