Correlation Between Symrise Ag and Novozymes
Can any of the company-specific risk be diversified away by investing in both Symrise Ag and Novozymes 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 Symrise Ag and Novozymes into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Symrise Ag PK and Novozymes AS, you can compare the effects of market volatilities on Symrise Ag and Novozymes 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 Symrise Ag with a short position of Novozymes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Symrise Ag and Novozymes.
Diversification Opportunities for Symrise Ag and Novozymes
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Symrise and Novozymes is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Symrise Ag PK and Novozymes AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Novozymes AS and Symrise Ag 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 Symrise Ag PK are associated (or correlated) with Novozymes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Novozymes AS has no effect on the direction of Symrise Ag i.e., Symrise Ag and Novozymes go up and down completely randomly.
Pair Corralation between Symrise Ag and Novozymes
Assuming the 90 days horizon Symrise Ag PK is expected to generate 0.83 times more return on investment than Novozymes. However, Symrise Ag PK is 1.2 times less risky than Novozymes. It trades about 0.04 of its potential returns per unit of risk. Novozymes AS is currently generating about 0.03 per unit of risk. If you would invest 2,530 in Symrise Ag PK on August 27, 2024 and sell it today you would earn a total of 228.00 from holding Symrise Ag PK or generate 9.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Symrise Ag PK vs. Novozymes AS
Performance |
| Timeline |
| Symrise Ag PK |
| Novozymes AS |
Symrise Ag and Novozymes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Symrise Ag and Novozymes
The main advantage of trading using opposite Symrise Ag and Novozymes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Symrise Ag position performs unexpectedly, Novozymes 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 Novozymes will offset losses from the drop in Novozymes' long position.| Symrise Ag vs. First Graphene | Symrise Ag vs. HUMANA INC | Symrise Ag vs. Aquagold International | Symrise Ag vs. Barloworld Ltd ADR |
| Novozymes vs. First Graphene | Novozymes vs. HUMANA INC | Novozymes vs. Aquagold International | Novozymes vs. Barloworld Ltd ADR |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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