Correlation Between BeiGene and Novo Nordisk
Can any of the company-specific risk be diversified away by investing in both BeiGene 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 BeiGene and Novo Nordisk into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BeiGene and Novo Nordisk AS, you can compare the effects of market volatilities on BeiGene 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 BeiGene with a short position of Novo Nordisk. Check out your portfolio center. Please also check ongoing floating volatility patterns of BeiGene and Novo Nordisk.
Diversification Opportunities for BeiGene and Novo Nordisk
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between BeiGene and Novo is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding BeiGene 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 BeiGene 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 BeiGene 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 BeiGene i.e., BeiGene and Novo Nordisk go up and down completely randomly.
Pair Corralation between BeiGene and Novo Nordisk
Given the investment horizon of 90 days BeiGene is expected to generate 0.98 times more return on investment than Novo Nordisk. However, BeiGene is 1.02 times less risky than Novo Nordisk. It trades about 0.01 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 20,599 in BeiGene on August 31, 2024 and sell it today you would earn a total of 17.00 from holding BeiGene or generate 0.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BeiGene vs. Novo Nordisk AS
Performance |
| Timeline |
| BeiGene |
| Novo Nordisk AS |
BeiGene and Novo Nordisk Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BeiGene and Novo Nordisk
The main advantage of trading using opposite BeiGene and Novo Nordisk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BeiGene 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.| BeiGene vs. Ascendis Pharma AS | BeiGene vs. Apellis Pharmaceuticals | BeiGene vs. Akero Therapeutics | BeiGene vs. Blueprint Medicines Corp |
| Novo Nordisk vs. Nuvalent | Novo Nordisk vs. Arcellx | Novo Nordisk vs. Vaxcyte | Novo Nordisk vs. Viridian 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
Other Complementary Tools
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. |