Correlation Between Novo Nordisk and Fynske Bank
Can any of the company-specific risk be diversified away by investing in both Novo Nordisk and Fynske Bank 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 Fynske Bank 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 Fynske Bank AS, you can compare the effects of market volatilities on Novo Nordisk and Fynske Bank 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 Fynske Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Novo Nordisk and Fynske Bank.
Diversification Opportunities for Novo Nordisk and Fynske Bank
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Novo and Fynske is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Novo Nordisk AS and Fynske Bank AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fynske Bank 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 Fynske Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fynske Bank AS has no effect on the direction of Novo Nordisk i.e., Novo Nordisk and Fynske Bank go up and down completely randomly.
Pair Corralation between Novo Nordisk and Fynske Bank
Assuming the 90 days trading horizon Novo Nordisk AS is expected to generate 1.14 times more return on investment than Fynske Bank. However, Novo Nordisk is 1.14 times more volatile than Fynske Bank AS. It trades about 0.06 of its potential returns per unit of risk. Fynske Bank AS is currently generating about 0.02 per unit of risk. If you would invest 62,240 in Novo Nordisk AS on November 27, 2024 and sell it today you would earn a total of 1,680 from holding Novo Nordisk AS or generate 2.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Novo Nordisk AS vs. Fynske Bank AS
Performance |
| Timeline |
| Novo Nordisk AS |
| Fynske Bank AS |
Novo Nordisk and Fynske Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Novo Nordisk and Fynske Bank
The main advantage of trading using opposite Novo Nordisk and Fynske Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Novo Nordisk position performs unexpectedly, Fynske Bank 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 Fynske Bank will offset losses from the drop in Fynske Bank'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 |
| Fynske Bank vs. Skjern Bank AS | Fynske Bank vs. Djurslands Bank | Fynske Bank vs. Sparekassen Sjaelland Fyn AS | Fynske Bank vs. Groenlandsbanken 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
Other Complementary Tools
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets |