Correlation Between Nxp Semiconductors and EQUINOR ASA

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Nxp Semiconductors and EQUINOR ASA 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 Nxp Semiconductors and EQUINOR ASA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nxp Semiconductors and EQUINOR ASA, you can compare the effects of market volatilities on Nxp Semiconductors and EQUINOR ASA 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 Nxp Semiconductors with a short position of EQUINOR ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nxp Semiconductors and EQUINOR ASA.

Diversification Opportunities for Nxp Semiconductors and EQUINOR ASA

0.28
  Correlation Coefficient

Modest diversification

The 3 months correlation between Nxp Semiconductors and EQUINOR is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Nxp Semiconductors and EQUINOR ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EQUINOR ASA and Nxp Semiconductors 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 Nxp Semiconductors are associated (or correlated) with EQUINOR ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EQUINOR ASA has no effect on the direction of Nxp Semiconductors i.e., Nxp Semiconductors and EQUINOR ASA go up and down completely randomly.

Pair Corralation between Nxp Semiconductors and EQUINOR ASA

Given the investment horizon of 90 days Nxp Semiconductors is expected to under-perform the EQUINOR ASA. In addition to that, Nxp Semiconductors is 1.03 times more volatile than EQUINOR ASA. It trades about -0.03 of its total potential returns per unit of risk. EQUINOR ASA is currently generating about 0.07 per unit of volatility. If you would invest  2,798  in EQUINOR ASA on March 28, 2022 and sell it today you would earn a total of  577.00  from holding EQUINOR ASA or generate 20.62% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Nxp Semiconductors  vs.  EQUINOR ASA

 Performance (%) 
      Timeline 
Nxp Semiconductors 
Nxp Semiconductors Performance
0 of 100
Over the last 90 days Nxp Semiconductors has generated negative risk-adjusted returns adding no value to investors with long positions. Despite sluggish performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in July 2022. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Structure and Payout Changes

Forward Annual Dividend Yield
0.022
Payout Ratio
0.24
Forward Annual Dividend Rate
3.38
Dividend Date
2022-07-06
Ex Dividend Date
2022-06-14

Nxp Semiconductors Price Channel

EQUINOR ASA 
EQUINOR Performance
0 of 100
Over the last 90 days EQUINOR ASA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical indicators, EQUINOR ASA is not utilizing all of its potentials. The new stock price tumult, may contribute to shorter-term losses for the shareholders.

Structure and Payout Changes

Forward Annual Dividend Yield
0.0233
Payout Ratio
0.5
Forward Annual Dividend Rate
0.8
Ex Dividend Date
2022-08-11

EQUINOR Price Channel

Nxp Semiconductors and EQUINOR ASA Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with Nxp Semiconductors and EQUINOR ASA

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

EQUINOR ASA

Pair trading matchups for EQUINOR ASA

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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.

Other Complementary Tools

Portfolio Backtesting
Avoid under-diversification and over-optimization by backtesting your portfolios
Go
Fundamentals Comparison
Compare fundamentals across multiple equities to find investing opportunities
Go
Price Exposure Probability
Analyze equity upside and downside potential for a given time horizon across multiple markets
Go
Companies Directory
Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals
Go
Technical Analysis
Check basic technical indicators and analysis based on most latest market data
Go
Financial Widgets
Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets
Go