Correlation Between PepGen and Novo Nordisk
Can any of the company-specific risk be diversified away by investing in both PepGen 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 PepGen and Novo Nordisk into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PepGen and Novo Nordisk AS, you can compare the effects of market volatilities on PepGen 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 PepGen with a short position of Novo Nordisk. Check out your portfolio center. Please also check ongoing floating volatility patterns of PepGen and Novo Nordisk.
Diversification Opportunities for PepGen and Novo Nordisk
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between PepGen and Novo is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding PepGen 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 PepGen 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 PepGen 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 PepGen i.e., PepGen and Novo Nordisk go up and down completely randomly.
Pair Corralation between PepGen and Novo Nordisk
Given the investment horizon of 90 days PepGen is expected to under-perform the Novo Nordisk. In addition to that, PepGen is 2.72 times more volatile than Novo Nordisk AS. It trades about -0.18 of its total potential returns per unit of risk. Novo Nordisk AS is currently generating about -0.06 per unit of volatility. If you would invest 11,080 in Novo Nordisk AS on August 31, 2024 and sell it today you would lose (421.00) from holding Novo Nordisk AS or give up 3.8% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
PepGen vs. Novo Nordisk AS
Performance |
| Timeline |
| PepGen |
| Novo Nordisk AS |
PepGen and Novo Nordisk Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PepGen and Novo Nordisk
The main advantage of trading using opposite PepGen and Novo Nordisk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PepGen 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.| PepGen vs. Pmv Pharmaceuticals | PepGen vs. Eliem Therapeutics | PepGen vs. MediciNova | PepGen vs. Pharvaris BV |
| Novo Nordisk vs. Nuvalent | Novo Nordisk vs. Arcellx | Novo Nordisk vs. Vaxcyte | Novo Nordisk vs. Viridian Therapeutics |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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