Correlation Between Novo Nordisk and Maj Invest

Can any of the company-specific risk be diversified away by investing in both Novo Nordisk and Maj Invest 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 Maj Invest 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 Maj Invest Pension, you can compare the effects of market volatilities on Novo Nordisk and Maj Invest 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 Maj Invest. Check out your portfolio center. Please also check ongoing floating volatility patterns of Novo Nordisk and Maj Invest.

Diversification Opportunities for Novo Nordisk and Maj Invest

0.58

Correlation Coefficient

Novo Nordisk  Maj Invest

Very weak diversification

The 3 months correlation between Novo and Maj is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Novo Nordisk AS and Maj Invest Pension in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maj Invest Pension 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 Maj Invest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maj Invest Pension has no effect on the direction of Novo Nordisk i.e., Novo Nordisk and Maj Invest go up and down completely randomly.

Pair Corralation between Novo Nordisk and Maj Invest

Assuming the 90 days trading horizon Novo Nordisk AS is expected to under-perform the Maj Invest. In addition to that, Novo Nordisk is 2.44 times more volatile than Maj Invest Pension. It trades about -0.06 of its total potential returns per unit of risk. Maj Invest Pension is currently generating about -0.13 per unit of volatility. If you would invest  12,881  in Maj Invest Pension on December 1, 2024 and sell it today you would lose (1,471) from holding Maj Invest Pension or give up 11.42% of portfolio value over 90 days.

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

Novo Nordisk AS  vs.  Maj Invest Pension

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.

Maj Invest Pension

Risk-Adjusted Performance

Very Weak

Over the last 90 days Maj Invest Pension has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating performance, the Stock's forward-looking indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Novo Nordisk and Maj Invest

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

The idea behind Novo Nordisk AS and Maj Invest Pension 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.