Correlation Between AOYAMA TRADING and Diamyd Medical
Can any of the company-specific risk be diversified away by investing in both AOYAMA TRADING 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 AOYAMA TRADING and Diamyd Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AOYAMA TRADING and Diamyd Medical AB, you can compare the effects of market volatilities on AOYAMA TRADING 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 AOYAMA TRADING with a short position of Diamyd Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of AOYAMA TRADING and Diamyd Medical.
Diversification Opportunities for AOYAMA TRADING and Diamyd Medical
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between AOYAMA and Diamyd is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding AOYAMA TRADING 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 AOYAMA TRADING 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 AOYAMA TRADING 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 AOYAMA TRADING i.e., AOYAMA TRADING and Diamyd Medical go up and down completely randomly.
Pair Corralation between AOYAMA TRADING and Diamyd Medical
Assuming the 90 days horizon AOYAMA TRADING is expected to generate 0.42 times more return on investment than Diamyd Medical. However, AOYAMA TRADING is 2.38 times less risky than Diamyd Medical. It trades about -0.05 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 1,360 in AOYAMA TRADING on November 30, 2024 and sell it today you would lose (40.00) from holding AOYAMA TRADING or give up 2.94% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AOYAMA TRADING vs. Diamyd Medical AB
Performance |
| Timeline |
| AOYAMA TRADING |
| Diamyd Medical AB |
AOYAMA TRADING and Diamyd Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AOYAMA TRADING and Diamyd Medical
The main advantage of trading using opposite AOYAMA TRADING and Diamyd Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AOYAMA TRADING 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.| AOYAMA TRADING vs. SOUTHWEST AIRLINES | AOYAMA TRADING vs. OFFICE DEPOT | AOYAMA TRADING vs. Infrastrutture Wireless Italiane | AOYAMA TRADING vs. SHELF DRILLING LTD |
| Diamyd Medical vs. Rayonier Advanced Materials | Diamyd Medical vs. NEWELL RUBBERMAID | Diamyd Medical vs. Broadcom | Diamyd Medical vs. Transport International Holdings |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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