Correlation Between AGNC INVESTMENT and Novo Nordisk
Can any of the company-specific risk be diversified away by investing in both AGNC INVESTMENT 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 AGNC INVESTMENT and Novo Nordisk into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AGNC INVESTMENT and Novo Nordisk AS, you can compare the effects of market volatilities on AGNC INVESTMENT 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 AGNC INVESTMENT with a short position of Novo Nordisk. Check out your portfolio center. Please also check ongoing floating volatility patterns of AGNC INVESTMENT and Novo Nordisk.
Diversification Opportunities for AGNC INVESTMENT and Novo Nordisk
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between AGNC and Novo is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding AGNC INVESTMENT 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 AGNC INVESTMENT 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 AGNC INVESTMENT 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 AGNC INVESTMENT i.e., AGNC INVESTMENT and Novo Nordisk go up and down completely randomly.
Pair Corralation between AGNC INVESTMENT and Novo Nordisk
Assuming the 90 days trading horizon AGNC INVESTMENT is expected to generate 0.41 times more return on investment than Novo Nordisk. However, AGNC INVESTMENT is 2.43 times less risky than Novo Nordisk. It trades about 0.22 of its potential returns per unit of risk. Novo Nordisk AS is currently generating about -0.06 per unit of risk. If you would invest 900.00 in AGNC INVESTMENT on November 4, 2024 and sell it today you would earn a total of 56.00 from holding AGNC INVESTMENT or generate 6.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AGNC INVESTMENT vs. Novo Nordisk AS
Performance |
| Timeline |
| AGNC INVESTMENT |
| Novo Nordisk AS |
AGNC INVESTMENT and Novo Nordisk Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AGNC INVESTMENT and Novo Nordisk
The main advantage of trading using opposite AGNC INVESTMENT and Novo Nordisk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AGNC INVESTMENT 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.| AGNC INVESTMENT vs. CN MODERN DAIRY | AGNC INVESTMENT vs. LIFEWAY FOODS | AGNC INVESTMENT vs. United Natural Foods | AGNC INVESTMENT vs. Align Technology |
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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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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