Correlation Between Novo Nordisk and Nykredit Invest
Can any of the company-specific risk be diversified away by investing in both Novo Nordisk and Nykredit Invest 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 Nykredit Invest 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 Nykredit Invest Korte, you can compare the effects of market volatilities on Novo Nordisk and Nykredit Invest 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 Nykredit Invest. Check out your portfolio center. Please also check ongoing floating volatility patterns of Novo Nordisk and Nykredit Invest.
Diversification Opportunities for Novo Nordisk and Nykredit Invest
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Novo and Nykredit is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Novo Nordisk AS and Nykredit Invest Korte in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nykredit Invest Korte 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 Nykredit Invest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nykredit Invest Korte has no effect on the direction of Novo Nordisk i.e., Novo Nordisk and Nykredit Invest go up and down completely randomly.
Pair Corralation between Novo Nordisk and Nykredit Invest
Assuming the 90 days trading horizon Novo Nordisk AS is expected to generate 30.64 times more return on investment than Nykredit Invest. However, Novo Nordisk is 30.64 times more volatile than Nykredit Invest Korte. It trades about 0.13 of its potential returns per unit of risk. Nykredit Invest Korte is currently generating about 0.27 per unit of risk. If you would invest 74,890 in Novo Nordisk AS on September 13, 2024 and sell it today you would earn a total of 4,140 from holding Novo Nordisk AS or generate 5.53% 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. Nykredit Invest Korte
Performance |
| Timeline |
| Novo Nordisk AS |
| Nykredit Invest Korte |
Novo Nordisk and Nykredit Invest Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Novo Nordisk and Nykredit Invest
The main advantage of trading using opposite Novo Nordisk and Nykredit Invest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Novo Nordisk position performs unexpectedly, Nykredit Invest 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 Nykredit Invest will offset losses from the drop in Nykredit Invest'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 |
| Nykredit Invest vs. Novo Nordisk AS | Nykredit Invest vs. Nordea Bank Abp | Nykredit Invest vs. DSV Panalpina AS | Nykredit Invest vs. AP Mller |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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