Correlation Between PFA Invest and Novo Nordisk
Can any of the company-specific risk be diversified away by investing in both PFA Invest 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 PFA Invest and Novo Nordisk into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PFA Invest Kreditobligationer and Novo Nordisk AS, you can compare the effects of market volatilities on PFA Invest 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 PFA Invest with a short position of Novo Nordisk. Check out your portfolio center. Please also check ongoing floating volatility patterns of PFA Invest and Novo Nordisk.
Diversification Opportunities for PFA Invest and Novo Nordisk
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between PFA and Novo is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding PFA Invest Kreditobligationer 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 PFA Invest 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 PFA Invest Kreditobligationer 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 PFA Invest i.e., PFA Invest and Novo Nordisk go up and down completely randomly.
Pair Corralation between PFA Invest and Novo Nordisk
Assuming the 90 days trading horizon PFA Invest is expected to generate 3.85 times less return on investment than Novo Nordisk. But when comparing it to its historical volatility, PFA Invest Kreditobligationer is 9.16 times less risky than Novo Nordisk. It trades about 0.09 of its potential returns per unit of risk. Novo Nordisk AS is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 47,146 in Novo Nordisk AS on October 12, 2024 and sell it today you would earn a total of 16,084 from holding Novo Nordisk AS or generate 34.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PFA Invest Kreditobligationer vs. Novo Nordisk AS
Performance |
| Timeline |
| PFA Invest Kreditobl |
| Novo Nordisk AS |
PFA Invest and Novo Nordisk Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PFA Invest and Novo Nordisk
The main advantage of trading using opposite PFA Invest and Novo Nordisk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PFA Invest 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.| PFA Invest vs. Novo Nordisk AS | PFA Invest vs. Nordea Bank Abp | PFA Invest vs. DSV Panalpina AS | PFA Invest vs. AP Mller |
| 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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