Correlation Between Diamyd Medical and Focus Home
Can any of the company-specific risk be diversified away by investing in both Diamyd Medical and Focus Home 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 Focus Home 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 Focus Home Interactive, you can compare the effects of market volatilities on Diamyd Medical and Focus Home 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 Focus Home. Check out your portfolio center. Please also check ongoing floating volatility patterns of Diamyd Medical and Focus Home.
Diversification Opportunities for Diamyd Medical and Focus Home
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Diamyd and Focus is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Diamyd Medical AB and Focus Home Interactive in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Focus Home Interactive 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 Focus Home. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Focus Home Interactive has no effect on the direction of Diamyd Medical i.e., Diamyd Medical and Focus Home go up and down completely randomly.
Pair Corralation between Diamyd Medical and Focus Home
Assuming the 90 days horizon Diamyd Medical AB is expected to generate 1.02 times more return on investment than Focus Home. However, Diamyd Medical is 1.02 times more volatile than Focus Home Interactive. It trades about 0.07 of its potential returns per unit of risk. Focus Home Interactive is currently generating about 0.01 per unit of risk. If you would invest 146.00 in Diamyd Medical AB on October 30, 2024 and sell it today you would earn a total of 5.00 from holding Diamyd Medical AB or generate 3.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Diamyd Medical AB vs. Focus Home Interactive
Performance |
| Timeline |
| Diamyd Medical AB |
| Focus Home Interactive |
Diamyd Medical and Focus Home Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Diamyd Medical and Focus Home
The main advantage of trading using opposite Diamyd Medical and Focus Home positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Diamyd Medical position performs unexpectedly, Focus Home 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 Focus Home will offset losses from the drop in Focus Home's long position.| Diamyd Medical vs. BioNTech SE | Diamyd Medical vs. Agilent Technologies | Diamyd Medical vs. PT Wintermar Offshore | Diamyd Medical vs. United Rentals |
| Focus Home vs. Hua Hong Semiconductor | Focus Home vs. SK TELECOM TDADR | Focus Home vs. Comba Telecom Systems | Focus Home vs. Charter Communications |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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