Correlation Between Nordic Semiconductor and MEDCAW INVESTMENTS

Can any of the company-specific risk be diversified away by investing in both Nordic Semiconductor and MEDCAW INVESTMENTS 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 MEDCAW INVESTMENTS 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 MEDCAW INVESTMENTS LS 01, you can compare the effects of market volatilities on Nordic Semiconductor and MEDCAW INVESTMENTS 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 MEDCAW INVESTMENTS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nordic Semiconductor and MEDCAW INVESTMENTS.

Diversification Opportunities for Nordic Semiconductor and MEDCAW INVESTMENTS

0.0

Correlation Coefficient

Nordic Semiconductor  MEDCAW INVESTMENTS

Pay attention - limited upside

The 3 months correlation between Nordic and MEDCAW is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Nordic Semiconductor ASA and MEDCAW INVESTMENTS LS 01 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MEDCAW INVESTMENTS 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 MEDCAW INVESTMENTS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MEDCAW INVESTMENTS has no effect on the direction of Nordic Semiconductor i.e., Nordic Semiconductor and MEDCAW INVESTMENTS go up and down completely randomly.

Pair Corralation between Nordic Semiconductor and MEDCAW INVESTMENTS

Assuming the 90 days horizon Nordic Semiconductor ASA is expected to generate 6.39 times more return on investment than MEDCAW INVESTMENTS. However, Nordic Semiconductor is 6.39 times more volatile than MEDCAW INVESTMENTS LS 01. It trades about 0.01 of its potential returns per unit of risk. MEDCAW INVESTMENTS LS 01 is currently generating about 0.0 per unit of risk. If you would invest  1,100  in Nordic Semiconductor ASA on October 22, 2024 and sell it today you would lose (120.00) from holding Nordic Semiconductor ASA or give up 10.91% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	99.75%
Values	Daily Returns

Nordic Semiconductor ASA  vs.  MEDCAW INVESTMENTS LS 01

Nordic Semiconductor ASA

Risk-Adjusted Performance

11 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Nordic Semiconductor ASA are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Nordic Semiconductor reported solid returns over the last few months and may actually be approaching a breakup point.

MEDCAW INVESTMENTS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MEDCAW INVESTMENTS LS 01 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, MEDCAW INVESTMENTS is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Nordic Semiconductor and MEDCAW INVESTMENTS

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

The idea behind Nordic Semiconductor ASA and MEDCAW INVESTMENTS LS 01 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.