Correlation Between Nordic Semiconductor and Atlantic Sapphire

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

Diversification Opportunities for Nordic Semiconductor and Atlantic Sapphire

0.69

Correlation Coefficient

Nordic Semiconductor  Atlantic Sapphire

Poor diversification

The 3 months correlation between Nordic and Atlantic is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Nordic Semiconductor ASA and Atlantic Sapphire As in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atlantic Sapphire 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 Atlantic Sapphire. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atlantic Sapphire has no effect on the direction of Nordic Semiconductor i.e., Nordic Semiconductor and Atlantic Sapphire go up and down completely randomly.

Pair Corralation between Nordic Semiconductor and Atlantic Sapphire

Assuming the 90 days trading horizon Nordic Semiconductor is expected to generate 2.53 times less return on investment than Atlantic Sapphire. But when comparing it to its historical volatility, Nordic Semiconductor ASA is 3.44 times less risky than Atlantic Sapphire. It trades about 0.1 of its potential returns per unit of risk. Atlantic Sapphire As is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  756.00  in Atlantic Sapphire As on April 24, 2025 and sell it today you would earn a total of  214.00  from holding Atlantic Sapphire As or generate 28.31% return on investment over 90 days.

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

Nordic Semiconductor ASA  vs.  Atlantic Sapphire As

Nordic Semiconductor ASA

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Nordic Semiconductor ASA are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting fundamental indicators, Nordic Semiconductor disclosed solid returns over the last few months and may actually be approaching a breakup point.

Atlantic Sapphire

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Atlantic Sapphire As are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite quite weak basic indicators, Atlantic Sapphire disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Nordic Semiconductor and Atlantic Sapphire

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

The idea behind Nordic Semiconductor ASA and Atlantic Sapphire As 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.