Correlation Between Novo Nordisk and BankInvest Hjt

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

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

Diversification Opportunities for Novo Nordisk and BankInvest Hjt

-0.09

Correlation Coefficient

Novo Nordisk  BankInvest Hjt

Good diversification

The 3 months correlation between Novo and BankInvest is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Novo Nordisk AS and BankInvest Hjt Udbytte in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BankInvest Hjt Udbytte and Novo Nordisk 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 Novo Nordisk AS are associated (or correlated) with BankInvest Hjt. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BankInvest Hjt Udbytte has no effect on the direction of Novo Nordisk i.e., Novo Nordisk and BankInvest Hjt go up and down completely randomly.

Pair Corralation between Novo Nordisk and BankInvest Hjt

Assuming the 90 days trading horizon Novo Nordisk AS is expected to under-perform the BankInvest Hjt. In addition to that, Novo Nordisk is 3.73 times more volatile than BankInvest Hjt Udbytte. It trades about -0.1 of its total potential returns per unit of risk. BankInvest Hjt Udbytte is currently generating about 0.05 per unit of volatility. If you would invest  14,470  in BankInvest Hjt Udbytte on December 24, 2024 and sell it today you would earn a total of  290.00  from holding BankInvest Hjt Udbytte or generate 2.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Novo Nordisk AS  vs.  BankInvest Hjt Udbytte

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. Despite unfluctuating performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

BankInvest Hjt Udbytte

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in BankInvest Hjt Udbytte are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound fundamental indicators, BankInvest Hjt is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Novo Nordisk and BankInvest Hjt

The main advantage of trading using opposite Novo Nordisk and BankInvest Hjt positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Novo Nordisk position performs unexpectedly, BankInvest Hjt 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 BankInvest Hjt will offset losses from the drop in BankInvest Hjt's long position.

The idea behind Novo Nordisk AS and BankInvest Hjt Udbytte 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.

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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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.