Correlation Between Nordic Semiconductor and PT Global

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Can any of the company-specific risk be diversified away by investing in both Nordic Semiconductor and PT Global 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 PT Global 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 PT Global Mediacom, you can compare the effects of market volatilities on Nordic Semiconductor and PT Global 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 PT Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nordic Semiconductor and PT Global.

Diversification Opportunities for Nordic Semiconductor and PT Global

0.55
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Nordic and 06L is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Nordic Semiconductor ASA and PT Global Mediacom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Global Mediacom 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 PT Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Global Mediacom has no effect on the direction of Nordic Semiconductor i.e., Nordic Semiconductor and PT Global go up and down completely randomly.

Pair Corralation between Nordic Semiconductor and PT Global

If you would invest  0.75  in PT Global Mediacom on September 5, 2024 and sell it today you would earn a total of  0.00  from holding PT Global Mediacom or generate 0.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Nordic Semiconductor ASA  vs.  PT Global Mediacom

 Performance 
       Timeline  
Nordic Semiconductor ASA 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Nordic Semiconductor ASA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.
PT Global Mediacom 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days PT Global Mediacom has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, PT Global is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Nordic Semiconductor and PT Global Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Nordic Semiconductor and PT Global

The main advantage of trading using opposite Nordic Semiconductor and PT Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nordic Semiconductor position performs unexpectedly, PT Global 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 PT Global will offset losses from the drop in PT Global's long position.
The idea behind Nordic Semiconductor ASA and PT Global Mediacom 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.

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