Correlation Between Novo Nordisk and BankIn Bredygt
Can any of the company-specific risk be diversified away by investing in both Novo Nordisk and BankIn Bredygt 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 BankIn Bredygt 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 BankIn Bredygt Klimaakt, you can compare the effects of market volatilities on Novo Nordisk and BankIn Bredygt 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 BankIn Bredygt. Check out your portfolio center. Please also check ongoing floating volatility patterns of Novo Nordisk and BankIn Bredygt.
Diversification Opportunities for Novo Nordisk and BankIn Bredygt
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Novo and BankIn is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Novo Nordisk AS and BankIn Bredygt Klimaakt in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BankIn Bredygt Klimaakt 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 BankIn Bredygt. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BankIn Bredygt Klimaakt has no effect on the direction of Novo Nordisk i.e., Novo Nordisk and BankIn Bredygt go up and down completely randomly.
Pair Corralation between Novo Nordisk and BankIn Bredygt
Assuming the 90 days trading horizon Novo Nordisk is expected to generate 1.06 times less return on investment than BankIn Bredygt. In addition to that, Novo Nordisk is 1.45 times more volatile than BankIn Bredygt Klimaakt. It trades about 0.03 of its total potential returns per unit of risk. BankIn Bredygt Klimaakt is currently generating about 0.04 per unit of volatility. If you would invest 10,080 in BankIn Bredygt Klimaakt on August 25, 2024 and sell it today you would earn a total of 690.00 from holding BankIn Bredygt Klimaakt or generate 6.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 58.08% |
| Values | Daily Returns |
Novo Nordisk AS vs. BankIn Bredygt Klimaakt
Performance |
| Timeline |
| Novo Nordisk AS |
| BankIn Bredygt Klimaakt |
Novo Nordisk and BankIn Bredygt Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Novo Nordisk and BankIn Bredygt
The main advantage of trading using opposite Novo Nordisk and BankIn Bredygt positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Novo Nordisk position performs unexpectedly, BankIn Bredygt 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 BankIn Bredygt will offset losses from the drop in BankIn Bredygt's long position.| Novo Nordisk vs. Vestas Wind Systems | Novo Nordisk vs. Danske Bank AS | Novo Nordisk vs. Bavarian Nordic | Novo Nordisk vs. DSV Panalpina AS |
| BankIn Bredygt vs. MapsPeople AS | BankIn Bredygt vs. Penneo AS | BankIn Bredygt vs. Dataproces Group AS | BankIn Bredygt vs. Orderyoyo AS |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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