Correlation Between Odyssey Semiconductor and Nordic Semiconductor
Can any of the company-specific risk be diversified away by investing in both Odyssey Semiconductor and Nordic Semiconductor 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 Odyssey Semiconductor and Nordic Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Odyssey Semiconductor Technologies and Nordic Semiconductor ASA, you can compare the effects of market volatilities on Odyssey Semiconductor and Nordic Semiconductor 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 Odyssey Semiconductor with a short position of Nordic Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Odyssey Semiconductor and Nordic Semiconductor.
Diversification Opportunities for Odyssey Semiconductor and Nordic Semiconductor
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Odyssey and Nordic is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Odyssey Semiconductor Technolo and Nordic Semiconductor ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nordic Semiconductor ASA and Odyssey 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 Odyssey Semiconductor Technologies are associated (or correlated) with Nordic Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nordic Semiconductor ASA has no effect on the direction of Odyssey Semiconductor i.e., Odyssey Semiconductor and Nordic Semiconductor go up and down completely randomly.
Pair Corralation between Odyssey Semiconductor and Nordic Semiconductor
Given the investment horizon of 90 days Odyssey Semiconductor Technologies is expected to generate 3.21 times more return on investment than Nordic Semiconductor. However, Odyssey Semiconductor is 3.21 times more volatile than Nordic Semiconductor ASA. It trades about 0.02 of its potential returns per unit of risk. Nordic Semiconductor ASA is currently generating about -0.01 per unit of risk. If you would invest 98.00 in Odyssey Semiconductor Technologies on September 23, 2024 and sell it today you would lose (96.00) from holding Odyssey Semiconductor Technologies or give up 97.96% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Odyssey Semiconductor Technolo vs. Nordic Semiconductor ASA
Performance |
Timeline |
Odyssey Semiconductor |
Nordic Semiconductor ASA |
Odyssey Semiconductor and Nordic Semiconductor Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Odyssey Semiconductor and Nordic Semiconductor
The main advantage of trading using opposite Odyssey Semiconductor and Nordic Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Odyssey Semiconductor position performs unexpectedly, Nordic Semiconductor 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 Nordic Semiconductor will offset losses from the drop in Nordic Semiconductor's long position.Odyssey Semiconductor vs. Alphawave IP Group | Odyssey Semiconductor vs. Arteris | Odyssey Semiconductor vs. Rohm Co Ltd | Odyssey Semiconductor vs. ams AG |
Nordic Semiconductor vs. Nordic Semiconductor ASA | Nordic Semiconductor vs. STMicroelectronics NV | Nordic Semiconductor vs. Rohm Co Ltd | Nordic Semiconductor vs. Asm Pacific Technology |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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