Correlation Between Immutep and Novo Nordisk

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

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

Diversification Opportunities for Immutep and Novo Nordisk

0.86

Correlation Coefficient

Immutep  Novo Nordisk

Very poor diversification

The 3 months correlation between Immutep and Novo is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Immutep Ltd ADR 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 Immutep 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 Immutep Ltd ADR 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 Immutep i.e., Immutep and Novo Nordisk go up and down completely randomly.

Pair Corralation between Immutep and Novo Nordisk

Given the investment horizon of 90 days Immutep Ltd ADR is expected to generate 1.85 times more return on investment than Novo Nordisk. However, Immutep is 1.85 times more volatile than Novo Nordisk AS. It trades about 0.02 of its potential returns per unit of risk. Novo Nordisk AS is currently generating about 0.03 per unit of risk. If you would invest  207.00  in Immutep Ltd ADR on September 2, 2024 and sell it today you would lose (4.00) from holding Immutep Ltd ADR or give up 1.93% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	99.19%
Values	Daily Returns

Immutep Ltd ADR  vs.  Novo Nordisk AS

Immutep Ltd ADR

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Immutep Ltd ADR has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's primary indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

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 conflicting performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Immutep and Novo Nordisk

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