Correlation Between Nordic Semiconductor and HYATT HOTELS-A

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

Diversification Opportunities for Nordic Semiconductor and HYATT HOTELS-A

-0.6

Correlation Coefficient

Nordic Semiconductor  HYATT HOTELS-A

Excellent diversification

The 3 months correlation between Nordic and HYATT is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Nordic Semiconductor ASA and HYATT HOTELS A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HYATT HOTELS A 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 HYATT HOTELS-A. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HYATT HOTELS A has no effect on the direction of Nordic Semiconductor i.e., Nordic Semiconductor and HYATT HOTELS-A go up and down completely randomly.

Pair Corralation between Nordic Semiconductor and HYATT HOTELS-A

Assuming the 90 days horizon Nordic Semiconductor is expected to generate 2.28 times less return on investment than HYATT HOTELS-A. In addition to that, Nordic Semiconductor is 2.08 times more volatile than HYATT HOTELS A. It trades about 0.01 of its total potential returns per unit of risk. HYATT HOTELS A is currently generating about 0.04 per unit of volatility. If you would invest  9,769  in HYATT HOTELS A on December 7, 2024 and sell it today you would earn a total of  2,896  from holding HYATT HOTELS A or generate 29.64% return on investment over 90 days.

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

Nordic Semiconductor ASA  vs.  HYATT HOTELS A

Nordic Semiconductor ASA

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Nordic Semiconductor ASA are ranked lower than 10 (%) 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.

HYATT HOTELS A

Risk-Adjusted Performance

Very Weak

Over the last 90 days HYATT HOTELS A has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Nordic Semiconductor and HYATT HOTELS-A

The main advantage of trading using opposite Nordic Semiconductor and HYATT HOTELS-A positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nordic Semiconductor position performs unexpectedly, HYATT HOTELS-A 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 HYATT HOTELS-A will offset losses from the drop in HYATT HOTELS-A's long position.

The idea behind Nordic Semiconductor ASA and HYATT HOTELS A 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.