Correlation Between RCI Hospitality and Novo Nordisk
Can any of the company-specific risk be diversified away by investing in both RCI Hospitality 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 RCI Hospitality and Novo Nordisk into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between RCI Hospitality Holdings and Novo Nordisk AS, you can compare the effects of market volatilities on RCI Hospitality 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 RCI Hospitality with a short position of Novo Nordisk. Check out your portfolio center. Please also check ongoing floating volatility patterns of RCI Hospitality and Novo Nordisk.
Diversification Opportunities for RCI Hospitality and Novo Nordisk
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between RCI and Novo is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding RCI Hospitality Holdings 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 RCI Hospitality 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 RCI Hospitality Holdings 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 RCI Hospitality i.e., RCI Hospitality and Novo Nordisk go up and down completely randomly.
Pair Corralation between RCI Hospitality and Novo Nordisk
Assuming the 90 days trading horizon RCI Hospitality Holdings is expected to under-perform the Novo Nordisk. In addition to that, RCI Hospitality is 1.1 times more volatile than Novo Nordisk AS. It trades about -0.02 of its total potential returns per unit of risk. Novo Nordisk AS is currently generating about 0.03 per unit of volatility. If you would invest 6,310 in Novo Nordisk AS on October 11, 2024 and sell it today you would earn a total of 1,670 from holding Novo Nordisk AS or generate 26.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
RCI Hospitality Holdings vs. Novo Nordisk AS
Performance |
| Timeline |
| RCI Hospitality Holdings |
| Novo Nordisk AS |
RCI Hospitality and Novo Nordisk Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RCI Hospitality and Novo Nordisk
The main advantage of trading using opposite RCI Hospitality and Novo Nordisk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RCI Hospitality 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.| RCI Hospitality vs. NXP Semiconductors NV | RCI Hospitality vs. Magnachip Semiconductor | RCI Hospitality vs. TERADATA | RCI Hospitality vs. Information Services International Dentsu |
| Novo Nordisk vs. Casio Computer CoLtd | Novo Nordisk vs. RCI Hospitality Holdings | Novo Nordisk vs. SCOTT TECHNOLOGY | Novo Nordisk vs. Cardinal Health |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
Other Complementary Tools
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges |