Correlation Between Novo Nordisk and Cessatech
Can any of the company-specific risk be diversified away by investing in both Novo Nordisk and Cessatech 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 Cessatech 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 Cessatech AS, you can compare the effects of market volatilities on Novo Nordisk and Cessatech 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 Cessatech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Novo Nordisk and Cessatech.
Diversification Opportunities for Novo Nordisk and Cessatech
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Novo and Cessatech is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Novo Nordisk AS and Cessatech AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cessatech AS 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 Cessatech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cessatech AS has no effect on the direction of Novo Nordisk i.e., Novo Nordisk and Cessatech go up and down completely randomly.
Pair Corralation between Novo Nordisk and Cessatech
Assuming the 90 days trading horizon Novo Nordisk AS is expected to under-perform the Cessatech. But the stock apears to be less risky and, when comparing its historical volatility, Novo Nordisk AS is 2.24 times less risky than Cessatech. The stock trades about -0.15 of its potential returns per unit of risk. The Cessatech AS is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 1,440 in Cessatech AS on September 2, 2024 and sell it today you would lose (85.00) from holding Cessatech AS or give up 5.9% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 33.33% |
| Values | Daily Returns |
Novo Nordisk AS vs. Cessatech AS
Performance |
| Timeline |
| Novo Nordisk AS |
| Cessatech AS |
Novo Nordisk and Cessatech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Novo Nordisk and Cessatech
The main advantage of trading using opposite Novo Nordisk and Cessatech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Novo Nordisk position performs unexpectedly, Cessatech 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 Cessatech will offset losses from the drop in Cessatech'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 |
| Cessatech vs. Prime Office AS | Cessatech vs. Jyske Bank AS | Cessatech vs. PARKEN Sport Entertainment | Cessatech vs. Hvidbjerg Bank |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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