Correlation Between Nordic Semiconductor and 26444HAE1

Can any of the company-specific risk be diversified away by investing in both Nordic Semiconductor and 26444HAE1 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 26444HAE1 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 DUKE ENERGY FLA, you can compare the effects of market volatilities on Nordic Semiconductor and 26444HAE1 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 26444HAE1. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nordic Semiconductor and 26444HAE1.

Diversification Opportunities for Nordic Semiconductor and 26444HAE1

0.14

Correlation Coefficient

Nordic Semiconductor  26444HAE1

Average diversification

The 3 months correlation between Nordic and 26444HAE1 is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Nordic Semiconductor ASA and DUKE ENERGY FLA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DUKE ENERGY FLA 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 26444HAE1. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DUKE ENERGY FLA has no effect on the direction of Nordic Semiconductor i.e., Nordic Semiconductor and 26444HAE1 go up and down completely randomly.

Pair Corralation between Nordic Semiconductor and 26444HAE1

Assuming the 90 days horizon Nordic Semiconductor ASA is expected to generate 9.95 times more return on investment than 26444HAE1. However, Nordic Semiconductor is 9.95 times more volatile than DUKE ENERGY FLA. It trades about 0.15 of its potential returns per unit of risk. DUKE ENERGY FLA is currently generating about 0.08 per unit of risk. If you would invest  865.00  in Nordic Semiconductor ASA on December 26, 2024 and sell it today you would earn a total of  394.00  from holding Nordic Semiconductor ASA or generate 45.55% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.33%
Values	Daily Returns

Nordic Semiconductor ASA  vs.  DUKE ENERGY FLA

Nordic Semiconductor ASA

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Nordic Semiconductor ASA are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Nordic Semiconductor reported solid returns over the last few months and may actually be approaching a breakup point.

DUKE ENERGY FLA

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in DUKE ENERGY FLA are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, 26444HAE1 is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Nordic Semiconductor and 26444HAE1

The main advantage of trading using opposite Nordic Semiconductor and 26444HAE1 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nordic Semiconductor position performs unexpectedly, 26444HAE1 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 26444HAE1 will offset losses from the drop in 26444HAE1's long position.

The idea behind Nordic Semiconductor ASA and DUKE ENERGY FLA 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.