Correlation Between PLAYTIKA HOLDING and Nordic Semiconductor

Can any of the company-specific risk be diversified away by investing in both PLAYTIKA HOLDING 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 PLAYTIKA HOLDING and Nordic Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between PLAYTIKA HOLDING DL 01 and Nordic Semiconductor ASA, you can compare the effects of market volatilities on PLAYTIKA HOLDING 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 PLAYTIKA HOLDING with a short position of Nordic Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of PLAYTIKA HOLDING and Nordic Semiconductor.

Diversification Opportunities for PLAYTIKA HOLDING and Nordic Semiconductor

-0.4

Correlation Coefficient

PLAYTIKA HOLDING  Nordic Semiconductor

Very good diversification

The 3 months correlation between PLAYTIKA and Nordic is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding PLAYTIKA HOLDING DL 01 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 PLAYTIKA HOLDING 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 PLAYTIKA HOLDING DL 01 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 PLAYTIKA HOLDING i.e., PLAYTIKA HOLDING and Nordic Semiconductor go up and down completely randomly.

Pair Corralation between PLAYTIKA HOLDING and Nordic Semiconductor

Assuming the 90 days horizon PLAYTIKA HOLDING DL 01 is expected to under-perform the Nordic Semiconductor. But the stock apears to be less risky and, when comparing its historical volatility, PLAYTIKA HOLDING DL 01 is 1.51 times less risky than Nordic Semiconductor. The stock trades about -0.23 of its potential returns per unit of risk. The Nordic Semiconductor ASA is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  836.00  in Nordic Semiconductor ASA on December 2, 2024 and sell it today you would earn a total of  344.00  from holding Nordic Semiconductor ASA or generate 41.15% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

PLAYTIKA HOLDING DL 01  vs.  Nordic Semiconductor ASA

PLAYTIKA HOLDING

Risk-Adjusted Performance

Very Weak

Over the last 90 days PLAYTIKA HOLDING DL 01 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Nordic Semiconductor ASA

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Nordic Semiconductor ASA are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Nordic Semiconductor reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with PLAYTIKA HOLDING and Nordic Semiconductor

The main advantage of trading using opposite PLAYTIKA HOLDING and Nordic Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PLAYTIKA HOLDING 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.

The idea behind PLAYTIKA HOLDING DL 01 and Nordic Semiconductor ASA 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.