Correlation Between Alfa Financial and Diamyd Medical
Can any of the company-specific risk be diversified away by investing in both Alfa Financial 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 Alfa Financial and Diamyd Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alfa Financial Software and Diamyd Medical AB, you can compare the effects of market volatilities on Alfa Financial 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 Alfa Financial with a short position of Diamyd Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alfa Financial and Diamyd Medical.
Diversification Opportunities for Alfa Financial and Diamyd Medical
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Alfa and Diamyd is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Alfa Financial Software 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 Alfa Financial 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 Alfa Financial Software 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 Alfa Financial i.e., Alfa Financial and Diamyd Medical go up and down completely randomly.
Pair Corralation between Alfa Financial and Diamyd Medical
Assuming the 90 days trading horizon Alfa Financial is expected to generate 1.3 times less return on investment than Diamyd Medical. But when comparing it to its historical volatility, Alfa Financial Software is 2.08 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 0.03 of returns per unit of risk over similar time horizon. If you would invest 144.00 in Diamyd Medical AB on October 25, 2024 and sell it today you would earn a total of 8.00 from holding Diamyd Medical AB or generate 5.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alfa Financial Software vs. Diamyd Medical AB
Performance |
| Timeline |
| Alfa Financial Software |
| Diamyd Medical AB |
Alfa Financial and Diamyd Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alfa Financial and Diamyd Medical
The main advantage of trading using opposite Alfa Financial and Diamyd Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alfa Financial 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.| Alfa Financial vs. Xinhua Winshare Publishing | Alfa Financial vs. CarsalesCom | Alfa Financial vs. Adtalem Global Education | Alfa Financial vs. STRAYER EDUCATION |
| Diamyd Medical vs. Easy Software AG | Diamyd Medical vs. Check Point Software | Diamyd Medical vs. FIRST SHIP LEASE | Diamyd Medical vs. United Rentals |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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