Correlation Between Symrise Ag and Novozymes A/S

Can any of the company-specific risk be diversified away by investing in both Symrise Ag and Novozymes A/S 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 A/S 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 B, you can compare the effects of market volatilities on Symrise Ag and Novozymes A/S 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 A/S. Check out your portfolio center. Please also check ongoing floating volatility patterns of Symrise Ag and Novozymes A/S.

Diversification Opportunities for Symrise Ag and Novozymes A/S

0.39

Correlation Coefficient

Symrise Ag  Novozymes A/S

Weak diversification

The 3 months correlation between Symrise and Novozymes is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Symrise Ag PK and Novozymes AS B in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Novozymes AS B 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 A/S. 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 B has no effect on the direction of Symrise Ag i.e., Symrise Ag and Novozymes A/S go up and down completely randomly.

Pair Corralation between Symrise Ag and Novozymes A/S

Assuming the 90 days horizon Symrise Ag PK is expected to under-perform the Novozymes A/S. But the pink sheet apears to be less risky and, when comparing its historical volatility, Symrise Ag PK is 1.89 times less risky than Novozymes A/S. The pink sheet trades about -0.1 of its potential returns per unit of risk. The Novozymes AS B is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  5,714  in Novozymes AS B on December 2, 2024 and sell it today you would earn a total of  351.00  from holding Novozymes AS B or generate 6.14% return on investment over 90 days.

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

Symrise Ag PK  vs.  Novozymes AS B

Symrise Ag PK

Risk-Adjusted Performance

Very Weak

Over the last 90 days Symrise Ag PK has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's technical and fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Novozymes AS B

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Novozymes AS B are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak primary indicators, Novozymes A/S may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Symrise Ag and Novozymes A/S

The main advantage of trading using opposite Symrise Ag and Novozymes A/S positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Symrise Ag position performs unexpectedly, Novozymes A/S 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 A/S will offset losses from the drop in Novozymes A/S's long position.

The idea behind Symrise Ag PK and Novozymes AS B 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.