Correlation Between Beam Therapeutics and Novo Nordisk
Can any of the company-specific risk be diversified away by investing in both Beam Therapeutics 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 Beam Therapeutics and Novo Nordisk into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Beam Therapeutics and Novo Nordisk AS, you can compare the effects of market volatilities on Beam Therapeutics 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 Beam Therapeutics with a short position of Novo Nordisk. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beam Therapeutics and Novo Nordisk.
Diversification Opportunities for Beam Therapeutics and Novo Nordisk
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Beam and Novo is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Beam Therapeutics 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 Beam Therapeutics 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 Beam Therapeutics 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 Beam Therapeutics i.e., Beam Therapeutics and Novo Nordisk go up and down completely randomly.
Pair Corralation between Beam Therapeutics and Novo Nordisk
Given the investment horizon of 90 days Beam Therapeutics is expected to generate 2.76 times more return on investment than Novo Nordisk. However, Beam Therapeutics is 2.76 times more volatile than Novo Nordisk AS. It trades about 0.13 of its potential returns per unit of risk. Novo Nordisk AS is currently generating about -0.15 per unit of risk. If you would invest 2,235 in Beam Therapeutics on August 27, 2024 and sell it today you would earn a total of 270.00 from holding Beam Therapeutics or generate 12.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Beam Therapeutics vs. Novo Nordisk AS
Performance |
| Timeline |
| Beam Therapeutics |
| Novo Nordisk AS |
Beam Therapeutics and Novo Nordisk Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Beam Therapeutics and Novo Nordisk
The main advantage of trading using opposite Beam Therapeutics and Novo Nordisk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beam Therapeutics 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.| Beam Therapeutics vs. Editas Medicine | Beam Therapeutics vs. Crispr Therapeutics AG | Beam Therapeutics vs. Caribou Biosciences | Beam Therapeutics vs. Verve Therapeutics |
| Novo Nordisk vs. Regeneron Pharmaceuticals | Novo Nordisk vs. Crispr Therapeutics AG | Novo Nordisk vs. Sarepta Therapeutics | Novo Nordisk vs. Intellia Therapeutics |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
Other Complementary Tools
| CEOs Directory Screen CEOs from public companies around the world | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities |