Correlation Between Nordic Semiconductor and AUSNUTRIA DAIRY

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

Diversification Opportunities for Nordic Semiconductor and AUSNUTRIA DAIRY

-0.3

Correlation Coefficient

Nordic Semiconductor  AUSNUTRIA DAIRY

Very good diversification

The 3 months correlation between Nordic and AUSNUTRIA is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Nordic Semiconductor ASA and AUSNUTRIA DAIRY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AUSNUTRIA DAIRY 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 AUSNUTRIA DAIRY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AUSNUTRIA DAIRY has no effect on the direction of Nordic Semiconductor i.e., Nordic Semiconductor and AUSNUTRIA DAIRY go up and down completely randomly.

Pair Corralation between Nordic Semiconductor and AUSNUTRIA DAIRY

Assuming the 90 days horizon Nordic Semiconductor ASA is expected to under-perform the AUSNUTRIA DAIRY. But the stock apears to be less risky and, when comparing its historical volatility, Nordic Semiconductor ASA is 2.78 times less risky than AUSNUTRIA DAIRY. The stock trades about -0.05 of its potential returns per unit of risk. The AUSNUTRIA DAIRY is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  25.00  in AUSNUTRIA DAIRY on September 29, 2024 and sell it today you would earn a total of  0.00  from holding AUSNUTRIA DAIRY or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Nordic Semiconductor ASA  vs.  AUSNUTRIA DAIRY

Nordic Semiconductor ASA

Risk-Adjusted Performance

0 of 100

Very Weak

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

AUSNUTRIA DAIRY

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in AUSNUTRIA DAIRY are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain technical indicators, AUSNUTRIA DAIRY may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Nordic Semiconductor and AUSNUTRIA DAIRY

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

The idea behind Nordic Semiconductor ASA and AUSNUTRIA DAIRY 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.