Correlation Between Nasdaq and NOVARTIS
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By analyzing existing cross correlation between Nasdaq Inc and NOVARTIS CAP P, you can compare the effects of market volatilities on Nasdaq and NOVARTIS 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 Nasdaq with a short position of NOVARTIS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nasdaq and NOVARTIS.
Diversification Opportunities for Nasdaq and NOVARTIS
Very good diversification
The 3 months correlation between Nasdaq and NOVARTIS is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Nasdaq Inc and NOVARTIS CAP P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NOVARTIS CAP P and Nasdaq 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 Nasdaq Inc are associated (or correlated) with NOVARTIS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NOVARTIS CAP P has no effect on the direction of Nasdaq i.e., Nasdaq and NOVARTIS go up and down completely randomly.
Pair Corralation between Nasdaq and NOVARTIS
Given the investment horizon of 90 days Nasdaq Inc is expected to generate 0.95 times more return on investment than NOVARTIS. However, Nasdaq Inc is 1.06 times less risky than NOVARTIS. It trades about 0.62 of its potential returns per unit of risk. NOVARTIS CAP P is currently generating about -0.04 per unit of risk. If you would invest 7,392 in Nasdaq Inc on September 1, 2024 and sell it today you would earn a total of 907.00 from holding Nasdaq Inc or generate 12.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 71.43% |
| Values | Daily Returns |
Nasdaq Inc vs. NOVARTIS CAP P
Performance |
| Timeline |
| Nasdaq Inc |
| NOVARTIS CAP P |
Nasdaq and NOVARTIS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nasdaq and NOVARTIS
The main advantage of trading using opposite Nasdaq and NOVARTIS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nasdaq position performs unexpectedly, NOVARTIS 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 NOVARTIS will offset losses from the drop in NOVARTIS's long position.The idea behind Nasdaq Inc and NOVARTIS CAP P pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| NOVARTIS vs. Pekin Life Insurance | NOVARTIS vs. Ameriprise Financial | NOVARTIS vs. United Fire Group | NOVARTIS vs. The Hanover Insurance |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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