Correlation Between Nordic Semiconductor and KRISPY KREME
Can any of the company-specific risk be diversified away by investing in both Nordic Semiconductor and KRISPY KREME 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 KRISPY KREME 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 KRISPY KREME DL 01, you can compare the effects of market volatilities on Nordic Semiconductor and KRISPY KREME 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 KRISPY KREME. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nordic Semiconductor and KRISPY KREME.
Diversification Opportunities for Nordic Semiconductor and KRISPY KREME
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Nordic and KRISPY is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Nordic Semiconductor ASA and KRISPY KREME DL 01 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KRISPY KREME DL 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 KRISPY KREME. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KRISPY KREME DL has no effect on the direction of Nordic Semiconductor i.e., Nordic Semiconductor and KRISPY KREME go up and down completely randomly.
Pair Corralation between Nordic Semiconductor and KRISPY KREME
Assuming the 90 days horizon Nordic Semiconductor ASA is expected to generate 0.27 times more return on investment than KRISPY KREME. However, Nordic Semiconductor ASA is 3.74 times less risky than KRISPY KREME. It trades about -0.22 of its potential returns per unit of risk. KRISPY KREME DL 01 is currently generating about -0.24 per unit of risk. If you would invest 1,220 in Nordic Semiconductor ASA on December 10, 2024 and sell it today you would lose (106.00) from holding Nordic Semiconductor ASA or give up 8.69% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Nordic Semiconductor ASA vs. KRISPY KREME DL 01
Performance |
Timeline |
Nordic Semiconductor ASA |
KRISPY KREME DL |
Nordic Semiconductor and KRISPY KREME Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Nordic Semiconductor and KRISPY KREME
The main advantage of trading using opposite Nordic Semiconductor and KRISPY KREME positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nordic Semiconductor position performs unexpectedly, KRISPY KREME 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 KRISPY KREME will offset losses from the drop in KRISPY KREME's long position.Nordic Semiconductor vs. MIRAMAR HOTEL INV | Nordic Semiconductor vs. Emperor Entertainment Hotel | Nordic Semiconductor vs. MAGNUM MINING EXP | Nordic Semiconductor vs. BRAEMAR HOTELS RES |
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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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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