Correlation Between Orsted AS and Novo Nordisk
Can any of the company-specific risk be diversified away by investing in both Orsted AS and Novo Nordisk 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 Orsted AS and Novo Nordisk into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Orsted AS and Novo Nordisk AS, you can compare the effects of market volatilities on Orsted AS and Novo Nordisk 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 Orsted AS with a short position of Novo Nordisk. Check out your portfolio center. Please also check ongoing floating volatility patterns of Orsted AS and Novo Nordisk.
Diversification Opportunities for Orsted AS and Novo Nordisk
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Orsted and Novo is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Orsted AS and Novo Nordisk AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Novo Nordisk AS and Orsted AS 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 Orsted AS are associated (or correlated) with Novo Nordisk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Novo Nordisk AS has no effect on the direction of Orsted AS i.e., Orsted AS and Novo Nordisk go up and down completely randomly.
Pair Corralation between Orsted AS and Novo Nordisk
Assuming the 90 days trading horizon Orsted AS is expected to under-perform the Novo Nordisk. In addition to that, Orsted AS is 1.52 times more volatile than Novo Nordisk AS. It trades about -0.12 of its total potential returns per unit of risk. Novo Nordisk AS is currently generating about -0.11 per unit of volatility. If you would invest 79,680 in Novo Nordisk AS on August 24, 2024 and sell it today you would lose (4,590) from holding Novo Nordisk AS or give up 5.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Orsted AS vs. Novo Nordisk AS
Performance |
| Timeline |
| Orsted AS |
| Novo Nordisk AS |
Orsted AS and Novo Nordisk Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Orsted AS and Novo Nordisk
The main advantage of trading using opposite Orsted AS and Novo Nordisk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Orsted AS position performs unexpectedly, Novo Nordisk 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 Novo Nordisk will offset losses from the drop in Novo Nordisk's long position.| Orsted AS vs. Alefarm Brewing AS | Orsted AS vs. Scandinavian Medical Solutions | Orsted AS vs. Jyske Bank AS | Orsted AS vs. Formuepleje Mix Medium |
| Novo Nordisk vs. Vestas Wind Systems | Novo Nordisk vs. Danske Bank AS | Novo Nordisk vs. Bavarian Nordic | Novo Nordisk vs. DSV Panalpina 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 CEOs Directory module to screen CEOs from public companies around the world.
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