Correlation Between Novo Nordisk and Cambria Global
Can any of the company-specific risk be diversified away by investing in both Novo Nordisk and Cambria Global 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 Cambria Global 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 Cambria Global Asset, you can compare the effects of market volatilities on Novo Nordisk and Cambria Global 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 Cambria Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Novo Nordisk and Cambria Global.
Diversification Opportunities for Novo Nordisk and Cambria Global
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Novo and Cambria is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Novo Nordisk AS and Cambria Global Asset in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cambria Global Asset 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 Cambria Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cambria Global Asset has no effect on the direction of Novo Nordisk i.e., Novo Nordisk and Cambria Global go up and down completely randomly.
Pair Corralation between Novo Nordisk and Cambria Global
Assuming the 90 days horizon Novo Nordisk AS is expected to generate 3.52 times more return on investment than Cambria Global. However, Novo Nordisk is 3.52 times more volatile than Cambria Global Asset. It trades about 0.05 of its potential returns per unit of risk. Cambria Global Asset is currently generating about 0.1 per unit of risk. If you would invest 12,140 in Novo Nordisk AS on February 11, 2024 and sell it today you would earn a total of 735.00 from holding Novo Nordisk AS or generate 6.05% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Novo Nordisk AS vs. Cambria Global Asset
Performance |
Timeline |
Novo Nordisk AS |
Cambria Global Asset |
Novo Nordisk and Cambria Global Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Novo Nordisk and Cambria Global
The main advantage of trading using opposite Novo Nordisk and Cambria Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Novo Nordisk position performs unexpectedly, Cambria Global 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 Cambria Global will offset losses from the drop in Cambria Global's long position.Novo Nordisk vs. biOasis Technologies | Novo Nordisk vs. Covalon Technologies | Novo Nordisk vs. Ceapro Inc | Novo Nordisk vs. Resverlogix Corp |
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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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