Correlation Between DiaMedica Therapeutics and GH Research
Can any of the company-specific risk be diversified away by investing in both DiaMedica Therapeutics and GH Research 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 GH Research into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DiaMedica Therapeutics and GH Research PLC, you can compare the effects of market volatilities on DiaMedica Therapeutics and GH Research 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 GH Research. Check out your portfolio center. Please also check ongoing floating volatility patterns of DiaMedica Therapeutics and GH Research.
Diversification Opportunities for DiaMedica Therapeutics and GH Research
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between DiaMedica and GHRS is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding DiaMedica Therapeutics and GH Research PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GH Research PLC 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 GH Research. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GH Research PLC has no effect on the direction of DiaMedica Therapeutics i.e., DiaMedica Therapeutics and GH Research go up and down completely randomly.
Pair Corralation between DiaMedica Therapeutics and GH Research
Given the investment horizon of 90 days DiaMedica Therapeutics is expected to generate 0.88 times more return on investment than GH Research. However, DiaMedica Therapeutics is 1.14 times less risky than GH Research. It trades about 0.29 of its potential returns per unit of risk. GH Research PLC is currently generating about 0.13 per unit of risk. If you would invest 443.00 in DiaMedica Therapeutics on September 3, 2024 and sell it today you would earn a total of 123.00 from holding DiaMedica Therapeutics or generate 27.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
DiaMedica Therapeutics vs. GH Research PLC
Performance |
| Timeline |
| DiaMedica Therapeutics |
| GH Research PLC |
DiaMedica Therapeutics and GH Research Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DiaMedica Therapeutics and GH Research
The main advantage of trading using opposite DiaMedica Therapeutics and GH Research positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DiaMedica Therapeutics position performs unexpectedly, GH Research 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 GH Research will offset losses from the drop in GH Research's long position.| DiaMedica Therapeutics vs. Milestone Pharmaceuticals | DiaMedica Therapeutics vs. Seres Therapeutics | DiaMedica Therapeutics vs. Inhibikase Therapeutics | DiaMedica Therapeutics vs. Oncolytics Biotech |
| GH Research vs. DiaMedica Therapeutics | GH Research vs. Lyra Therapeutics | GH Research vs. Centessa Pharmaceuticals PLC |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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