Correlation Between Odyssey Semiconductor and NVE

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

Diversification Opportunities for Odyssey Semiconductor and NVE

-0.08

Correlation Coefficient

Odyssey Semiconductor  NVE

Good diversification

The 3 months correlation between Odyssey and NVE is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Odyssey Semiconductor Technolo and NVE Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NVE Corporation 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 NVE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NVE Corporation has no effect on the direction of Odyssey Semiconductor i.e., Odyssey Semiconductor and NVE go up and down completely randomly.

Pair Corralation between Odyssey Semiconductor and NVE

Given the investment horizon of 90 days Odyssey Semiconductor Technologies is expected to generate 5.15 times more return on investment than NVE. However, Odyssey Semiconductor is 5.15 times more volatile than NVE Corporation. It trades about 0.02 of its potential returns per unit of risk. NVE Corporation is currently generating about 0.06 per unit of risk. If you would invest  7.40  in Odyssey Semiconductor Technologies on September 30, 2024 and sell it today you would lose (5.40) from holding Odyssey Semiconductor Technologies or give up 72.97% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Odyssey Semiconductor Technolo  vs.  NVE Corp.

Odyssey Semiconductor

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Odyssey Semiconductor Technologies are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite fairly fragile forward indicators, Odyssey Semiconductor demonstrated solid returns over the last few months and may actually be approaching a breakup point.

NVE Corporation

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in NVE Corporation are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, NVE is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Odyssey Semiconductor and NVE

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

The idea behind Odyssey Semiconductor Technologies and NVE Corporation 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.