Correlation Between EVS Broadcast and Diamyd Medical
Can any of the company-specific risk be diversified away by investing in both EVS Broadcast and Diamyd Medical 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 EVS Broadcast and Diamyd Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EVS Broadcast Equipment and Diamyd Medical AB, you can compare the effects of market volatilities on EVS Broadcast and Diamyd Medical 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 EVS Broadcast with a short position of Diamyd Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of EVS Broadcast and Diamyd Medical.
Diversification Opportunities for EVS Broadcast and Diamyd Medical
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between EVS and Diamyd is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding EVS Broadcast Equipment and Diamyd Medical AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Diamyd Medical AB and EVS Broadcast 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 EVS Broadcast Equipment are associated (or correlated) with Diamyd Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Diamyd Medical AB has no effect on the direction of EVS Broadcast i.e., EVS Broadcast and Diamyd Medical go up and down completely randomly.
Pair Corralation between EVS Broadcast and Diamyd Medical
Assuming the 90 days trading horizon EVS Broadcast is expected to generate 1.68 times less return on investment than Diamyd Medical. But when comparing it to its historical volatility, EVS Broadcast Equipment is 3.44 times less risky than Diamyd Medical. It trades about 0.06 of its potential returns per unit of risk. Diamyd Medical AB is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 136.00 in Diamyd Medical AB on October 20, 2024 and sell it today you would earn a total of 16.00 from holding Diamyd Medical AB or generate 11.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
EVS Broadcast Equipment vs. Diamyd Medical AB
Performance |
| Timeline |
| EVS Broadcast Equipment |
| Diamyd Medical AB |
EVS Broadcast and Diamyd Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EVS Broadcast and Diamyd Medical
The main advantage of trading using opposite EVS Broadcast and Diamyd Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EVS Broadcast position performs unexpectedly, Diamyd Medical 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 Diamyd Medical will offset losses from the drop in Diamyd Medical's long position.| EVS Broadcast vs. Diamyd Medical AB | EVS Broadcast vs. Hyrican Informationssysteme Aktiengesellschaft | EVS Broadcast vs. Pure Storage | EVS Broadcast vs. Genertec Universal Medical |
| Diamyd Medical vs. Corporate Office Properties | Diamyd Medical vs. TRADEDOUBLER AB SK | Diamyd Medical vs. alstria office REIT AG | Diamyd Medical vs. Indutrade AB |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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