Correlation Between IBEX Technologies and Novo Nordisk

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

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

Diversification Opportunities for IBEX Technologies and Novo Nordisk

-0.24

Correlation Coefficient

IBEX Technologies  Novo Nordisk

Very good diversification

The 3 months correlation between IBEX and Novo is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding IBEX Technologies 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 IBEX Technologies 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 IBEX Technologies 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 IBEX Technologies i.e., IBEX Technologies and Novo Nordisk go up and down completely randomly.

Pair Corralation between IBEX Technologies and Novo Nordisk

Assuming the 90 days horizon IBEX Technologies is expected to generate 2.46 times less return on investment than Novo Nordisk. But when comparing it to its historical volatility, IBEX Technologies is 1.31 times less risky than Novo Nordisk. It trades about 0.03 of its potential returns per unit of risk. Novo Nordisk AS is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  9,740  in Novo Nordisk AS on September 22, 2024 and sell it today you would earn a total of  220.00  from holding Novo Nordisk AS or generate 2.26% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.65%
Values	Daily Returns

IBEX Technologies  vs.  Novo Nordisk AS

IBEX Technologies

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in IBEX Technologies are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, IBEX Technologies is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Novo Nordisk AS

Risk-Adjusted Performance

0 of 100

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 latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with IBEX Technologies and Novo Nordisk

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

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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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.