Correlation Between Banco Ita and Novo Nordisk

Can any of the company-specific risk be diversified away by investing in both Banco Ita 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 Banco Ita and Novo Nordisk into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Banco Ita Chile and Novo Nordisk AS, you can compare the effects of market volatilities on Banco Ita 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 Banco Ita with a short position of Novo Nordisk. Check out your portfolio center. Please also check ongoing floating volatility patterns of Banco Ita and Novo Nordisk.

Diversification Opportunities for Banco Ita and Novo Nordisk

0.0

Correlation Coefficient

Banco Ita  Novo Nordisk

Pay attention - limited upside

The 3 months correlation between Banco and Novo is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Banco Ita Chile 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 Banco Ita 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 Banco Ita Chile 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 Banco Ita i.e., Banco Ita and Novo Nordisk go up and down completely randomly.

Pair Corralation between Banco Ita and Novo Nordisk

If you would invest (100.00) in Banco Ita Chile on December 27, 2024 and sell it today you would earn a total of  100.00  from holding Banco Ita Chile or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Banco Ita Chile  vs.  Novo Nordisk AS

Banco Ita Chile

Risk-Adjusted Performance

Very Weak

Over the last 90 days Banco Ita Chile has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent fundamental indicators, Banco Ita is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Novo Nordisk AS

Risk-Adjusted Performance

Very Weak

Over the last 90 days Novo Nordisk AS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Banco Ita and Novo Nordisk

The main advantage of trading using opposite Banco Ita and Novo Nordisk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Banco Ita 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.

The idea behind Banco Ita Chile and Novo Nordisk AS pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.