Correlation Between SWISS WATER and Diamyd Medical
Can any of the company-specific risk be diversified away by investing in both SWISS WATER 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 SWISS WATER and Diamyd Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SWISS WATER DECAFFCOFFEE and Diamyd Medical AB, you can compare the effects of market volatilities on SWISS WATER 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 SWISS WATER with a short position of Diamyd Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of SWISS WATER and Diamyd Medical.
Diversification Opportunities for SWISS WATER and Diamyd Medical
-0.83 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between SWISS and Diamyd is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding SWISS WATER DECAFFCOFFEE 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 SWISS WATER 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 SWISS WATER DECAFFCOFFEE 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 SWISS WATER i.e., SWISS WATER and Diamyd Medical go up and down completely randomly.
Pair Corralation between SWISS WATER and Diamyd Medical
Assuming the 90 days horizon SWISS WATER DECAFFCOFFEE is expected to generate 0.55 times more return on investment than Diamyd Medical. However, SWISS WATER DECAFFCOFFEE is 1.81 times less risky than Diamyd Medical. It trades about 0.15 of its potential returns per unit of risk. Diamyd Medical AB is currently generating about 0.05 per unit of risk. If you would invest 252.00 in SWISS WATER DECAFFCOFFEE on September 2, 2024 and sell it today you would earn a total of 20.00 from holding SWISS WATER DECAFFCOFFEE or generate 7.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SWISS WATER DECAFFCOFFEE vs. Diamyd Medical AB
Performance |
| Timeline |
| SWISS WATER DECAFFCOFFEE |
| Diamyd Medical AB |
SWISS WATER and Diamyd Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SWISS WATER and Diamyd Medical
The main advantage of trading using opposite SWISS WATER and Diamyd Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SWISS WATER 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.| SWISS WATER vs. Molson Coors Beverage | SWISS WATER vs. Suntory Beverage Food | SWISS WATER vs. COSMOSTEEL HLDGS | SWISS WATER vs. Khiron Life Sciences |
| Diamyd Medical vs. Superior Plus Corp | Diamyd Medical vs. NMI Holdings | Diamyd Medical vs. Origin Agritech | Diamyd Medical vs. SIVERS SEMICONDUCTORS 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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