Correlation Between Novo Nordisk and ATRYS HEALTH
Can any of the company-specific risk be diversified away by investing in both Novo Nordisk and ATRYS HEALTH 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 ATRYS HEALTH 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 ATRYS HEALTH SA, you can compare the effects of market volatilities on Novo Nordisk and ATRYS HEALTH 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 ATRYS HEALTH. Check out your portfolio center. Please also check ongoing floating volatility patterns of Novo Nordisk and ATRYS HEALTH.
Diversification Opportunities for Novo Nordisk and ATRYS HEALTH
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Novo and ATRYS is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Novo Nordisk AS and ATRYS HEALTH SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATRYS HEALTH SA 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 ATRYS HEALTH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ATRYS HEALTH SA has no effect on the direction of Novo Nordisk i.e., Novo Nordisk and ATRYS HEALTH go up and down completely randomly.
Pair Corralation between Novo Nordisk and ATRYS HEALTH
Assuming the 90 days trading horizon Novo Nordisk AS is expected to generate 0.88 times more return on investment than ATRYS HEALTH. However, Novo Nordisk AS is 1.13 times less risky than ATRYS HEALTH. It trades about 0.03 of its potential returns per unit of risk. ATRYS HEALTH SA is currently generating about -0.05 per unit of risk. If you would invest 6,310 in Novo Nordisk AS on September 24, 2024 and sell it today you would earn a total of 1,730 from holding Novo Nordisk AS or generate 27.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Novo Nordisk AS vs. ATRYS HEALTH SA
Performance |
| Timeline |
| Novo Nordisk AS |
| ATRYS HEALTH SA |
Novo Nordisk and ATRYS HEALTH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Novo Nordisk and ATRYS HEALTH
The main advantage of trading using opposite Novo Nordisk and ATRYS HEALTH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Novo Nordisk position performs unexpectedly, ATRYS HEALTH 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 ATRYS HEALTH will offset losses from the drop in ATRYS HEALTH's long position.| Novo Nordisk vs. Mercedes Benz Group AG | Novo Nordisk vs. Vertex Pharmaceuticals Incorporated | Novo Nordisk vs. Moderna | Novo Nordisk vs. WUXI BIOLOGICS UNSPADR2 |
| ATRYS HEALTH vs. Novo Nordisk AS | ATRYS HEALTH vs. Mercedes Benz Group AG | ATRYS HEALTH vs. Vertex Pharmaceuticals Incorporated | ATRYS HEALTH vs. Moderna |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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