Correlation Between Cizzle Biotechnology and Nordic Semiconductor

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

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

Diversification Opportunities for Cizzle Biotechnology and Nordic Semiconductor

0.2

Correlation Coefficient

Cizzle Biotechnology  Nordic Semiconductor

Modest diversification

The 3 months correlation between Cizzle and Nordic is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Cizzle Biotechnology Holdings 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 Cizzle Biotechnology 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 Cizzle Biotechnology Holdings 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 Cizzle Biotechnology i.e., Cizzle Biotechnology and Nordic Semiconductor go up and down completely randomly.

Pair Corralation between Cizzle Biotechnology and Nordic Semiconductor

Assuming the 90 days trading horizon Cizzle Biotechnology Holdings is expected to generate 1.38 times more return on investment than Nordic Semiconductor. However, Cizzle Biotechnology is 1.38 times more volatile than Nordic Semiconductor ASA. It trades about 0.03 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  165.00  in Cizzle Biotechnology Holdings on October 11, 2024 and sell it today you would earn a total of  30.00  from holding Cizzle Biotechnology Holdings or generate 18.18% return on investment over 90 days.

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

Cizzle Biotechnology Holdings  vs.  Nordic Semiconductor ASA

Cizzle Biotechnology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cizzle Biotechnology Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Cizzle Biotechnology is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Nordic Semiconductor ASA

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Nordic Semiconductor ASA are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Nordic Semiconductor may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Cizzle Biotechnology and Nordic Semiconductor

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

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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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.