Correlation Between SIVERS SEMICONDUCTORS and Novo Nordisk
Can any of the company-specific risk be diversified away by investing in both SIVERS SEMICONDUCTORS and Novo Nordisk 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 SIVERS SEMICONDUCTORS and Novo Nordisk into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SIVERS SEMICONDUCTORS AB and Novo Nordisk AS, you can compare the effects of market volatilities on SIVERS SEMICONDUCTORS and Novo Nordisk 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 SIVERS SEMICONDUCTORS with a short position of Novo Nordisk. Check out your portfolio center. Please also check ongoing floating volatility patterns of SIVERS SEMICONDUCTORS and Novo Nordisk.
Diversification Opportunities for SIVERS SEMICONDUCTORS and Novo Nordisk
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between SIVERS and Novo is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding SIVERS SEMICONDUCTORS AB and Novo Nordisk AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Novo Nordisk AS and SIVERS 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 SIVERS SEMICONDUCTORS AB are associated (or correlated) with Novo Nordisk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Novo Nordisk AS has no effect on the direction of SIVERS SEMICONDUCTORS i.e., SIVERS SEMICONDUCTORS and Novo Nordisk go up and down completely randomly.
Pair Corralation between SIVERS SEMICONDUCTORS and Novo Nordisk
Assuming the 90 days horizon SIVERS SEMICONDUCTORS AB is expected to under-perform the Novo Nordisk. In addition to that, SIVERS SEMICONDUCTORS is 3.21 times more volatile than Novo Nordisk AS. It trades about -0.02 of its total potential returns per unit of risk. Novo Nordisk AS is currently generating about 0.02 per unit of volatility. If you would invest 9,288 in Novo Nordisk AS on September 1, 2024 and sell it today you would earn a total of 712.00 from holding Novo Nordisk AS or generate 7.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.64% |
| Values | Daily Returns |
SIVERS SEMICONDUCTORS AB vs. Novo Nordisk AS
Performance |
| Timeline |
| SIVERS SEMICONDUCTORS |
| Novo Nordisk AS |
SIVERS SEMICONDUCTORS and Novo Nordisk Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SIVERS SEMICONDUCTORS and Novo Nordisk
The main advantage of trading using opposite SIVERS SEMICONDUCTORS and Novo Nordisk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SIVERS SEMICONDUCTORS position performs unexpectedly, Novo Nordisk 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 Novo Nordisk will offset losses from the drop in Novo Nordisk's long position.The idea behind SIVERS SEMICONDUCTORS AB and Novo Nordisk 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.| Novo Nordisk vs. GameStop Corp | Novo Nordisk vs. OURGAME INTHOLDL 00005 | Novo Nordisk vs. GAMING FAC SA | Novo Nordisk vs. QBE Insurance Group |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
Other Complementary Tools
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments |