Correlation Between Novo Nordisk and BIONTECH
Can any of the company-specific risk be diversified away by investing in both Novo Nordisk and BIONTECH 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 Novo Nordisk and BIONTECH into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Novo Nordisk AS and BIONTECH SE DRN, you can compare the effects of market volatilities on Novo Nordisk and BIONTECH 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 Novo Nordisk with a short position of BIONTECH. Check out your portfolio center. Please also check ongoing floating volatility patterns of Novo Nordisk and BIONTECH.
Diversification Opportunities for Novo Nordisk and BIONTECH
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Novo and BIONTECH is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Novo Nordisk AS and BIONTECH SE DRN in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BIONTECH SE DRN and Novo Nordisk 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 Novo Nordisk AS are associated (or correlated) with BIONTECH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BIONTECH SE DRN has no effect on the direction of Novo Nordisk i.e., Novo Nordisk and BIONTECH go up and down completely randomly.
Pair Corralation between Novo Nordisk and BIONTECH
Assuming the 90 days trading horizon Novo Nordisk AS is expected to under-perform the BIONTECH. But the stock apears to be less risky and, when comparing its historical volatility, Novo Nordisk AS is 1.75 times less risky than BIONTECH. The stock trades about -0.14 of its potential returns per unit of risk. The BIONTECH SE DRN is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 2,981 in BIONTECH SE DRN on August 28, 2024 and sell it today you would earn a total of 1,349 from holding BIONTECH SE DRN or generate 45.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Novo Nordisk AS vs. BIONTECH SE DRN
Performance |
| Timeline |
| Novo Nordisk AS |
| BIONTECH SE DRN |
Novo Nordisk and BIONTECH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Novo Nordisk and BIONTECH
The main advantage of trading using opposite Novo Nordisk and BIONTECH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Novo Nordisk position performs unexpectedly, BIONTECH 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 BIONTECH will offset losses from the drop in BIONTECH's long position.| Novo Nordisk vs. Spotify Technology SA | Novo Nordisk vs. Raytheon Technologies | Novo Nordisk vs. Micron Technology | Novo Nordisk vs. Zoom Video Communications |
| BIONTECH vs. Fras le SA | BIONTECH vs. Clave Indices De | BIONTECH vs. BTG Pactual Logstica | BIONTECH vs. Telefonaktiebolaget LM Ericsson |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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