Correlation Between Nordic Semiconductor and Cembra Money
Can any of the company-specific risk be diversified away by investing in both Nordic Semiconductor and Cembra Money 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 Cembra Money 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 Cembra Money Bank, you can compare the effects of market volatilities on Nordic Semiconductor and Cembra Money 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 Cembra Money. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nordic Semiconductor and Cembra Money.
Diversification Opportunities for Nordic Semiconductor and Cembra Money
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Nordic and Cembra is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Nordic Semiconductor ASA and Cembra Money Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cembra Money Bank 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 Cembra Money. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cembra Money Bank has no effect on the direction of Nordic Semiconductor i.e., Nordic Semiconductor and Cembra Money go up and down completely randomly.
Pair Corralation between Nordic Semiconductor and Cembra Money
Assuming the 90 days trading horizon Nordic Semiconductor ASA is expected to generate 2.23 times more return on investment than Cembra Money. However, Nordic Semiconductor is 2.23 times more volatile than Cembra Money Bank. It trades about 0.12 of its potential returns per unit of risk. Cembra Money Bank is currently generating about 0.23 per unit of risk. If you would invest 10,538 in Nordic Semiconductor ASA on October 25, 2024 and sell it today you would earn a total of 1,497 from holding Nordic Semiconductor ASA or generate 14.21% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Nordic Semiconductor ASA vs. Cembra Money Bank
Performance |
Timeline |
Nordic Semiconductor ASA |
Cembra Money Bank |
Nordic Semiconductor and Cembra Money Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Nordic Semiconductor and Cembra Money
The main advantage of trading using opposite Nordic Semiconductor and Cembra Money positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nordic Semiconductor position performs unexpectedly, Cembra Money 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 Cembra Money will offset losses from the drop in Cembra Money's long position.Nordic Semiconductor vs. Learning Technologies Group | Nordic Semiconductor vs. Coor Service Management | Nordic Semiconductor vs. MTI Wireless Edge | Nordic Semiconductor vs. Allianz Technology Trust |
Cembra Money vs. Toyota Motor Corp | Cembra Money vs. SoftBank Group Corp | Cembra Money vs. OTP Bank Nyrt | Cembra Money vs. ONEOK Inc |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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