Correlation Between Ams AG and Nordic Semiconductor

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

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

Diversification Opportunities for Ams AG and Nordic Semiconductor

0.32

Correlation Coefficient

Ams AG  Nordic Semiconductor

Weak diversification

The 3 months correlation between Ams and Nordic is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding ams AG 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 Ams AG 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 ams AG 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 Ams AG i.e., Ams AG and Nordic Semiconductor go up and down completely randomly.

Pair Corralation between Ams AG and Nordic Semiconductor

If you would invest  855.00  in Nordic Semiconductor ASA on October 23, 2024 and sell it today you would earn a total of  0.00  from holding Nordic Semiconductor ASA or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	90.0%
Values	Daily Returns

ams AG  vs.  Nordic Semiconductor ASA

ams AG

Risk-Adjusted Performance

0 of 100

Very Weak

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

Nordic Semiconductor ASA

Risk-Adjusted Performance

0 of 100

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 fairly strong fundamental indicators, Nordic Semiconductor is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Ams AG and Nordic Semiconductor

The main advantage of trading using opposite Ams AG and Nordic Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ams AG 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 ams AG 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.