Correlation Between Nordic Semiconductor and Aeluma

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

Diversification Opportunities for Nordic Semiconductor and Aeluma

-0.64

Correlation Coefficient

Nordic Semiconductor  Aeluma

Excellent diversification

The 3 months correlation between Nordic and Aeluma is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Nordic Semiconductor ASA and Aeluma Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aeluma Inc 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 Aeluma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aeluma Inc has no effect on the direction of Nordic Semiconductor i.e., Nordic Semiconductor and Aeluma go up and down completely randomly.

Pair Corralation between Nordic Semiconductor and Aeluma

Assuming the 90 days horizon Nordic Semiconductor ASA is expected to generate 0.46 times more return on investment than Aeluma. However, Nordic Semiconductor ASA is 2.19 times less risky than Aeluma. It trades about 0.18 of its potential returns per unit of risk. Aeluma Inc is currently generating about -0.06 per unit of risk. If you would invest  893.00  in Nordic Semiconductor ASA on December 20, 2024 and sell it today you would earn a total of  325.00  from holding Nordic Semiconductor ASA or generate 36.39% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	93.75%
Values	Daily Returns

Nordic Semiconductor ASA  vs.  Aeluma Inc

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 14 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile fundamental indicators, Nordic Semiconductor showed solid returns over the last few months and may actually be approaching a breakup point.

Aeluma Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Aeluma Inc 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 primary 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 Aeluma

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

The idea behind Nordic Semiconductor ASA and Aeluma Inc 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.