Correlation Between Novo Nordisk and Green Hydrogen
Can any of the company-specific risk be diversified away by investing in both Novo Nordisk and Green Hydrogen 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 Green Hydrogen 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 Green Hydrogen Systems, you can compare the effects of market volatilities on Novo Nordisk and Green Hydrogen 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 Green Hydrogen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Novo Nordisk and Green Hydrogen.
Diversification Opportunities for Novo Nordisk and Green Hydrogen
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Novo and Green is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Novo Nordisk AS and Green Hydrogen Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Green Hydrogen Systems 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 Green Hydrogen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Green Hydrogen Systems has no effect on the direction of Novo Nordisk i.e., Novo Nordisk and Green Hydrogen go up and down completely randomly.
Pair Corralation between Novo Nordisk and Green Hydrogen
Assuming the 90 days trading horizon Novo Nordisk AS is expected to generate 0.36 times more return on investment than Green Hydrogen. However, Novo Nordisk AS is 2.75 times less risky than Green Hydrogen. It trades about 0.03 of its potential returns per unit of risk. Green Hydrogen Systems is currently generating about -0.04 per unit of risk. If you would invest 49,075 in Novo Nordisk AS on November 21, 2024 and sell it today you would earn a total of 9,625 from holding Novo Nordisk AS or generate 19.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Novo Nordisk AS vs. Green Hydrogen Systems
Performance |
| Timeline |
| Novo Nordisk AS |
| Green Hydrogen Systems |
Novo Nordisk and Green Hydrogen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Novo Nordisk and Green Hydrogen
The main advantage of trading using opposite Novo Nordisk and Green Hydrogen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Novo Nordisk position performs unexpectedly, Green Hydrogen 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 Green Hydrogen will offset losses from the drop in Green Hydrogen'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 |
| Green Hydrogen vs. Ambu AS | Green Hydrogen vs. GN Store Nord | Green Hydrogen vs. Bavarian Nordic | Green Hydrogen vs. FLSmidth Co |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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