46.19 -0.31 (-0.67%) Buy

Don't go shopping for NVO now, it is underperforming the market

13 min read

NVO delivered lacklustre performance today. On a longer term basis, investors in NOVO NORDISK A S (Foreign) made +0.03% per day. Monday's performance of -0.67% was a underperformance compared to it's daily average.

[Themes containing NVO]

NVO showed a bearish trend over the last 3 months. During this period NVO delivered -2.61% and saw a maximum drawdown of -13.38%. There was a short signal during this period which returned +1.71%.


NVO has been outperforming the SP500 index in recent time. It showed significant underperformance (compared to the SP500 index) from 27 Jan, 2016 to 9 Oct, 2018. Over the last 2 years 11 months and 10 days, NVO underperformed the SP500 index on 50% days. Which indicates that on days NVO underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.

NVO returned losses on 54% days in the last three months. During this time, it delivered on average -0.03% per day. It delivered it's worst daily return of -7.35%, during this period, on Thursday, 4 Oct, 2018. The longest stort-term trend during this period was 5 losing days, which started on 18 Oct, 2018 and ended on 24 Oct, 2018. This bearish trend lost -4.03% of investor capital.

The last 12 months saw NVO's investors making profits in 4 months and incurring losses in 8 months. NVO was less consistent in delivering monthly returs than SP500 index. NVO significantly outperformed SP500 index in Nov 2018, when it returned +7.97% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. NVO had a longer winning streak of losing months than SP500 index. It went down in 3 straight months (from Feb 2018 to Apr 2018) during which period it delivered -14.61%. It is interesting to note that both NVO and SP500 index significantly outperform during months when quarterly/annual results are announced.

If you do chose to invest in a share, invest for the lifetime.
-- Sandeep Sahajpal

NVO is currently seeing overall increase in volatility. In comparison, the SP500 index is seeing increase in volatility. During the last three months, there was a significant surge in NVO's volatility from 19 Sep, 2018 to 29 Oct, 2018. While there was a significant surge in the SP500 index's volatility from 25 Sep, 2018 to 29 Oct, 2018.

Advanced/professional short-term investors should note that NVO has significant positive skewness in it's return distribution. This indicates that investors can expect NVO to recover from drawdowns quickly. Which makes NVO a good candidate for investing on short-term bullish trends or even counter-trends hoping for a pull-back.

SP500 index has more chance of extreme outcomes than NVO. Therefore, SP500 must receive a lower allocation than NVO in your portfolio. NVO usually has shorter drawdown period than the SP500 index.

On a general note (since you are interested in NVO), two instruments that deserve special mention are NIHD and I. They have significantly outperformed the overall market this year.

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