Correlation Between DiaMedica Therapeutics and Genmab AS
Can any of the company-specific risk be diversified away by investing in both DiaMedica Therapeutics and Genmab AS 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 Genmab AS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DiaMedica Therapeutics and Genmab AS, you can compare the effects of market volatilities on DiaMedica Therapeutics and Genmab AS 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 Genmab AS. Check out your portfolio center. Please also check ongoing floating volatility patterns of DiaMedica Therapeutics and Genmab AS.
Diversification Opportunities for DiaMedica Therapeutics and Genmab AS
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between DiaMedica and Genmab is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding DiaMedica Therapeutics and Genmab AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genmab AS 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 Genmab AS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genmab AS has no effect on the direction of DiaMedica Therapeutics i.e., DiaMedica Therapeutics and Genmab AS go up and down completely randomly.
Pair Corralation between DiaMedica Therapeutics and Genmab AS
Given the investment horizon of 90 days DiaMedica Therapeutics is expected to generate 2.48 times more return on investment than Genmab AS. However, DiaMedica Therapeutics is 2.48 times more volatile than Genmab AS. It trades about 0.08 of its potential returns per unit of risk. Genmab AS is currently generating about -0.07 per unit of risk. If you would invest 144.00 in DiaMedica Therapeutics on September 3, 2024 and sell it today you would earn a total of 422.00 from holding DiaMedica Therapeutics or generate 293.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
DiaMedica Therapeutics vs. Genmab AS
Performance |
| Timeline |
| DiaMedica Therapeutics |
| Genmab AS |
DiaMedica Therapeutics and Genmab AS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DiaMedica Therapeutics and Genmab AS
The main advantage of trading using opposite DiaMedica Therapeutics and Genmab AS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DiaMedica Therapeutics position performs unexpectedly, Genmab AS 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 Genmab AS will offset losses from the drop in Genmab AS's long position.| DiaMedica Therapeutics vs. Milestone Pharmaceuticals | DiaMedica Therapeutics vs. Seres Therapeutics | DiaMedica Therapeutics vs. Inhibikase Therapeutics | DiaMedica Therapeutics vs. Oncolytics Biotech |
| Genmab AS vs. DiaMedica Therapeutics | Genmab AS vs. Lyra Therapeutics | Genmab AS 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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