Correlation Between New Residential and Nordic Semiconductor
Can any of the company-specific risk be diversified away by investing in both New Residential 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 New Residential and Nordic Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between New Residential Investment and Nordic Semiconductor ASA, you can compare the effects of market volatilities on New Residential 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 New Residential with a short position of Nordic Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of New Residential and Nordic Semiconductor.
Diversification Opportunities for New Residential and Nordic Semiconductor
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between New and Nordic is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding New Residential Investment 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 New Residential 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 New Residential Investment 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 New Residential i.e., New Residential and Nordic Semiconductor go up and down completely randomly.
Pair Corralation between New Residential and Nordic Semiconductor
Assuming the 90 days trading horizon New Residential Investment is expected to generate 0.33 times more return on investment than Nordic Semiconductor. However, New Residential Investment is 3.07 times less risky than Nordic Semiconductor. It trades about 0.11 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 599.00 in New Residential Investment on December 2, 2024 and sell it today you would earn a total of 565.00 from holding New Residential Investment or generate 94.32% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
New Residential Investment vs. Nordic Semiconductor ASA
Performance |
Timeline |
New Residential Inve |
Nordic Semiconductor ASA |
New Residential and Nordic Semiconductor Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with New Residential and Nordic Semiconductor
The main advantage of trading using opposite New Residential and Nordic Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New Residential 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.New Residential vs. PRECISION DRILLING P | New Residential vs. Major Drilling Group | New Residential vs. Cleanaway Waste Management | New Residential vs. Rayonier Advanced Materials |
Nordic Semiconductor vs. COMMERCIAL VEHICLE | Nordic Semiconductor vs. MHP Hotel AG | Nordic Semiconductor vs. Cars Inc | Nordic Semiconductor vs. Sunstone Hotel Investors |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
Other Complementary Tools
Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges |