Correlation Between Nordic Semiconductor and TITAN MACHINERY

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

Diversification Opportunities for Nordic Semiconductor and TITAN MACHINERY

-0.34

Correlation Coefficient

Nordic Semiconductor  TITAN MACHINERY

Very good diversification

The 3 months correlation between Nordic and TITAN is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Nordic Semiconductor ASA and TITAN MACHINERY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TITAN MACHINERY 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 TITAN MACHINERY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TITAN MACHINERY has no effect on the direction of Nordic Semiconductor i.e., Nordic Semiconductor and TITAN MACHINERY go up and down completely randomly.

Pair Corralation between Nordic Semiconductor and TITAN MACHINERY

Assuming the 90 days horizon Nordic Semiconductor ASA is expected to generate 0.83 times more return on investment than TITAN MACHINERY. However, Nordic Semiconductor ASA is 1.2 times less risky than TITAN MACHINERY. It trades about 0.1 of its potential returns per unit of risk. TITAN MACHINERY is currently generating about -0.13 per unit of risk. If you would invest  801.00  in Nordic Semiconductor ASA on September 23, 2024 and sell it today you would earn a total of  34.00  from holding Nordic Semiconductor ASA or generate 4.24% return on investment over 90 days.

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

Nordic Semiconductor ASA  vs.  TITAN MACHINERY

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. 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.

TITAN MACHINERY

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in TITAN MACHINERY are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, TITAN MACHINERY is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Nordic Semiconductor and TITAN MACHINERY

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

The idea behind Nordic Semiconductor ASA and TITAN MACHINERY 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..