Correlation Between Diamyd Medical and GENIUS METALS
Can any of the company-specific risk be diversified away by investing in both Diamyd Medical and GENIUS METALS 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 Diamyd Medical and GENIUS METALS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Diamyd Medical AB and GENIUS METALS INC, you can compare the effects of market volatilities on Diamyd Medical and GENIUS METALS 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 Diamyd Medical with a short position of GENIUS METALS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Diamyd Medical and GENIUS METALS.
Diversification Opportunities for Diamyd Medical and GENIUS METALS
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Diamyd and GENIUS is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Diamyd Medical AB and GENIUS METALS INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GENIUS METALS INC and Diamyd Medical 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 Diamyd Medical AB are associated (or correlated) with GENIUS METALS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GENIUS METALS INC has no effect on the direction of Diamyd Medical i.e., Diamyd Medical and GENIUS METALS go up and down completely randomly.
Pair Corralation between Diamyd Medical and GENIUS METALS
Assuming the 90 days horizon Diamyd Medical is expected to generate 2.43 times less return on investment than GENIUS METALS. But when comparing it to its historical volatility, Diamyd Medical AB is 1.8 times less risky than GENIUS METALS. It trades about 0.03 of its potential returns per unit of risk. GENIUS METALS INC is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 5.05 in GENIUS METALS INC on November 3, 2024 and sell it today you would lose (0.10) from holding GENIUS METALS INC or give up 1.98% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Diamyd Medical AB vs. GENIUS METALS INC
Performance |
| Timeline |
| Diamyd Medical AB |
| GENIUS METALS INC |
Diamyd Medical and GENIUS METALS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Diamyd Medical and GENIUS METALS
The main advantage of trading using opposite Diamyd Medical and GENIUS METALS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Diamyd Medical position performs unexpectedly, GENIUS METALS 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 GENIUS METALS will offset losses from the drop in GENIUS METALS's long position.| Diamyd Medical vs. Novo Nordisk AS | Diamyd Medical vs. CSL LTD SPONADR | Diamyd Medical vs. Mercedes Benz Group AG | Diamyd Medical vs. Vertex Pharmaceuticals Incorporated |
| GENIUS METALS vs. BAKED GAMES SA | GENIUS METALS vs. Algonquin Power Utilities | GENIUS METALS vs. FRACTAL GAMING GROUP | GENIUS METALS vs. NAKED WINES 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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