Correlation Between Nordic Semiconductor and Host Hotels

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Nordic Semiconductor and Host Hotels 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 Nordic Semiconductor and Host Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nordic Semiconductor ASA and Host Hotels Resorts, you can compare the effects of market volatilities on Nordic Semiconductor and Host Hotels 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 Nordic Semiconductor with a short position of Host Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nordic Semiconductor and Host Hotels.

Diversification Opportunities for Nordic Semiconductor and Host Hotels

-0.24
  Correlation Coefficient

Very good diversification

The 3 months correlation between Nordic and Host is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Nordic Semiconductor ASA and Host Hotels Resorts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Host Hotels Resorts and Nordic Semiconductor 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 Nordic Semiconductor ASA are associated (or correlated) with Host Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Host Hotels Resorts has no effect on the direction of Nordic Semiconductor i.e., Nordic Semiconductor and Host Hotels go up and down completely randomly.

Pair Corralation between Nordic Semiconductor and Host Hotels

Assuming the 90 days trading horizon Nordic Semiconductor ASA is expected to under-perform the Host Hotels. In addition to that, Nordic Semiconductor is 2.37 times more volatile than Host Hotels Resorts. It trades about -0.13 of its total potential returns per unit of risk. Host Hotels Resorts is currently generating about 0.06 per unit of volatility. If you would invest  1,765  in Host Hotels Resorts on August 31, 2024 and sell it today you would earn a total of  86.00  from holding Host Hotels Resorts or generate 4.87% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Nordic Semiconductor ASA  vs.  Host Hotels Resorts

 Performance 
       Timeline  
Nordic Semiconductor ASA 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Nordic Semiconductor ASA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in December 2024. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.
Host Hotels Resorts 

Risk-Adjusted Performance

4 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Host Hotels Resorts are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Host Hotels is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Nordic Semiconductor and Host Hotels Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Nordic Semiconductor and Host Hotels

The main advantage of trading using opposite Nordic Semiconductor and Host Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nordic Semiconductor position performs unexpectedly, Host Hotels 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 Host Hotels will offset losses from the drop in Host Hotels' long position.
The idea behind Nordic Semiconductor ASA and Host Hotels Resorts pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.

Other Complementary Tools

Sign In To Macroaxis
Sign in to explore Macroaxis' wealth optimization platform and fintech modules
CEOs Directory
Screen CEOs from public companies around the world
Positions Ratings
Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance
Fundamental Analysis
View fundamental data based on most recent published financial statements
Portfolio Analyzer
Portfolio analysis module that provides access to portfolio diagnostics and optimization engine