Correlation Between Diamyd Medical and Bill Holdings
Can any of the company-specific risk be diversified away by investing in both Diamyd Medical and Bill Holdings 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 Bill Holdings 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 Bill Holdings, you can compare the effects of market volatilities on Diamyd Medical and Bill Holdings 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 Bill Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Diamyd Medical and Bill Holdings.
Diversification Opportunities for Diamyd Medical and Bill Holdings
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Diamyd and Bill is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Diamyd Medical AB and Bill Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bill Holdings 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 Bill Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bill Holdings has no effect on the direction of Diamyd Medical i.e., Diamyd Medical and Bill Holdings go up and down completely randomly.
Pair Corralation between Diamyd Medical and Bill Holdings
Assuming the 90 days horizon Diamyd Medical is expected to generate 4.64 times less return on investment than Bill Holdings. But when comparing it to its historical volatility, Diamyd Medical AB is 1.1 times less risky than Bill Holdings. It trades about 0.1 of its potential returns per unit of risk. Bill Holdings is currently generating about 0.41 of returns per unit of risk over similar time horizon. If you would invest 5,350 in Bill Holdings on September 5, 2024 and sell it today you would earn a total of 2,823 from holding Bill Holdings or generate 52.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Diamyd Medical AB vs. Bill Holdings
Performance |
| Timeline |
| Diamyd Medical AB |
| Bill Holdings |
Diamyd Medical and Bill Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Diamyd Medical and Bill Holdings
The main advantage of trading using opposite Diamyd Medical and Bill Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Diamyd Medical position performs unexpectedly, Bill Holdings 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 Bill Holdings will offset losses from the drop in Bill Holdings' long position.| Diamyd Medical vs. Nufarm Limited | Diamyd Medical vs. SOFI TECHNOLOGIES | Diamyd Medical vs. ACCSYS TECHPLC EO | Diamyd Medical vs. AAC TECHNOLOGHLDGADR |
| Bill Holdings vs. NORWEGIAN AIR SHUT | Bill Holdings vs. Diamyd Medical AB | Bill Holdings vs. Altair Engineering | Bill Holdings vs. Corsair Gaming |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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