Correlation Between MedMira and Novo Nordisk
Can any of the company-specific risk be diversified away by investing in both MedMira 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 MedMira and Novo Nordisk into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MedMira and Novo Nordisk AS, you can compare the effects of market volatilities on MedMira 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 MedMira with a short position of Novo Nordisk. Check out your portfolio center. Please also check ongoing floating volatility patterns of MedMira and Novo Nordisk.
Diversification Opportunities for MedMira and Novo Nordisk
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between MedMira and Novo is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding MedMira 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 MedMira 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 MedMira 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 MedMira i.e., MedMira and Novo Nordisk go up and down completely randomly.
Pair Corralation between MedMira and Novo Nordisk
Assuming the 90 days horizon MedMira is expected to generate 1.47 times more return on investment than Novo Nordisk. However, MedMira is 1.47 times more volatile than Novo Nordisk AS. It trades about 0.19 of its potential returns per unit of risk. Novo Nordisk AS is currently generating about -0.14 per unit of risk. If you would invest 5.00 in MedMira on August 25, 2024 and sell it today you would earn a total of 0.74 from holding MedMira or generate 14.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
MedMira vs. Novo Nordisk AS
Performance |
| Timeline |
| MedMira |
| Novo Nordisk AS |
MedMira and Novo Nordisk Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MedMira and Novo Nordisk
The main advantage of trading using opposite MedMira and Novo Nordisk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MedMira 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.| MedMira vs. Oxford Cannabinoid Technologies | MedMira vs. Pharming Group NV | MedMira vs. Kane Biotech | MedMira vs. Health Sciences Gr |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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