Correlation Between Novo Nordisk and WuXi Biologics
Can any of the company-specific risk be diversified away by investing in both Novo Nordisk and WuXi Biologics 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 WuXi Biologics 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 WuXi Biologics, you can compare the effects of market volatilities on Novo Nordisk and WuXi Biologics 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 WuXi Biologics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Novo Nordisk and WuXi Biologics.
Diversification Opportunities for Novo Nordisk and WuXi Biologics
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Novo and WuXi is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Novo Nordisk AS and WuXi Biologics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WuXi Biologics 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 WuXi Biologics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WuXi Biologics has no effect on the direction of Novo Nordisk i.e., Novo Nordisk and WuXi Biologics go up and down completely randomly.
Pair Corralation between Novo Nordisk and WuXi Biologics
Considering the 90-day investment horizon Novo Nordisk AS is expected to generate 0.53 times more return on investment than WuXi Biologics. However, Novo Nordisk AS is 1.88 times less risky than WuXi Biologics. It trades about -0.06 of its potential returns per unit of risk. WuXi Biologics is currently generating about -0.22 per unit of risk. If you would invest 10,972 in Novo Nordisk AS on September 3, 2024 and sell it today you would lose (292.00) from holding Novo Nordisk AS or give up 2.66% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Novo Nordisk AS vs. WuXi Biologics
Performance |
| Timeline |
| Novo Nordisk AS |
| WuXi Biologics |
Novo Nordisk and WuXi Biologics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Novo Nordisk and WuXi Biologics
The main advantage of trading using opposite Novo Nordisk and WuXi Biologics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Novo Nordisk position performs unexpectedly, WuXi Biologics 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 WuXi Biologics will offset losses from the drop in WuXi Biologics' long position.| Novo Nordisk vs. Regeneron Pharmaceuticals | Novo Nordisk vs. Crispr Therapeutics AG | Novo Nordisk vs. Sarepta Therapeutics | Novo Nordisk vs. Intellia Therapeutics |
| WuXi Biologics vs. Therapeutic Solutions International | WuXi Biologics vs. Alpha Cognition | WuXi Biologics vs. Regen BioPharma | WuXi Biologics vs. Vg Life Sciences |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
Other Complementary Tools
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites |