Correlation Between DiaMedica Therapeutics and Amphastar
Can any of the company-specific risk be diversified away by investing in both DiaMedica Therapeutics and Amphastar 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 DiaMedica Therapeutics and Amphastar into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DiaMedica Therapeutics and Amphastar P, you can compare the effects of market volatilities on DiaMedica Therapeutics and Amphastar 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 DiaMedica Therapeutics with a short position of Amphastar. Check out your portfolio center. Please also check ongoing floating volatility patterns of DiaMedica Therapeutics and Amphastar.
Diversification Opportunities for DiaMedica Therapeutics and Amphastar
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between DiaMedica and Amphastar is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding DiaMedica Therapeutics and Amphastar P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amphastar P and DiaMedica Therapeutics 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 DiaMedica Therapeutics are associated (or correlated) with Amphastar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amphastar P has no effect on the direction of DiaMedica Therapeutics i.e., DiaMedica Therapeutics and Amphastar go up and down completely randomly.
Pair Corralation between DiaMedica Therapeutics and Amphastar
Given the investment horizon of 90 days DiaMedica Therapeutics is expected to generate 1.62 times more return on investment than Amphastar. However, DiaMedica Therapeutics is 1.62 times more volatile than Amphastar P. It trades about 0.12 of its potential returns per unit of risk. Amphastar P is currently generating about -0.01 per unit of risk. If you would invest 543.00 in DiaMedica Therapeutics on November 1, 2024 and sell it today you would earn a total of 42.00 from holding DiaMedica Therapeutics or generate 7.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
DiaMedica Therapeutics vs. Amphastar P
Performance |
| Timeline |
| DiaMedica Therapeutics |
| Amphastar P |
DiaMedica Therapeutics and Amphastar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DiaMedica Therapeutics and Amphastar
The main advantage of trading using opposite DiaMedica Therapeutics and Amphastar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DiaMedica Therapeutics position performs unexpectedly, Amphastar 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 Amphastar will offset losses from the drop in Amphastar's long position.| DiaMedica Therapeutics vs. Milestone Pharmaceuticals | DiaMedica Therapeutics vs. Seres Therapeutics | DiaMedica Therapeutics vs. Inhibikase Therapeutics | DiaMedica Therapeutics vs. Oncolytics Biotech |
| Amphastar vs. Collegium Pharmaceutical | Amphastar vs. Alkermes Plc | Amphastar vs. Evolus Inc | Amphastar vs. Neurocrine Biosciences |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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