Correlation Between Novo Nordisk and Gemina Laboratories
Can any of the company-specific risk be diversified away by investing in both Novo Nordisk and Gemina Laboratories 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 Gemina Laboratories 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 Gemina Laboratories, you can compare the effects of market volatilities on Novo Nordisk and Gemina Laboratories 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 Gemina Laboratories. Check out your portfolio center. Please also check ongoing floating volatility patterns of Novo Nordisk and Gemina Laboratories.
Diversification Opportunities for Novo Nordisk and Gemina Laboratories
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Novo and Gemina is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Novo Nordisk AS and Gemina Laboratories in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gemina Laboratories 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 Gemina Laboratories. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gemina Laboratories has no effect on the direction of Novo Nordisk i.e., Novo Nordisk and Gemina Laboratories go up and down completely randomly.
Pair Corralation between Novo Nordisk and Gemina Laboratories
Assuming the 90 days horizon Novo Nordisk AS is expected to under-perform the Gemina Laboratories. But the pink sheet apears to be less risky and, when comparing its historical volatility, Novo Nordisk AS is 2.86 times less risky than Gemina Laboratories. The pink sheet trades about -0.14 of its potential returns per unit of risk. The Gemina Laboratories is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 31.00 in Gemina Laboratories on September 12, 2024 and sell it today you would earn a total of 24.00 from holding Gemina Laboratories or generate 77.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 98.44% |
| Values | Daily Returns |
Novo Nordisk AS vs. Gemina Laboratories
Performance |
| Timeline |
| Novo Nordisk AS |
| Gemina Laboratories |
Novo Nordisk and Gemina Laboratories Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Novo Nordisk and Gemina Laboratories
The main advantage of trading using opposite Novo Nordisk and Gemina Laboratories positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Novo Nordisk position performs unexpectedly, Gemina Laboratories 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 Gemina Laboratories will offset losses from the drop in Gemina Laboratories' long position.| Novo Nordisk vs. Sino Biopharmaceutical Ltd | Novo Nordisk vs. Defence Therapeutics | Novo Nordisk vs. Aileron Therapeutics | Novo Nordisk vs. Enlivex Therapeutics |
| Gemina Laboratories vs. Sino Biopharmaceutical Ltd | Gemina Laboratories vs. Defence Therapeutics | Gemina Laboratories vs. Aileron Therapeutics | Gemina Laboratories vs. Enlivex 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
Other Complementary Tools
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. |