Correlation Between Diamyd Medical and Hua Hong
Can any of the company-specific risk be diversified away by investing in both Diamyd Medical and Hua Hong 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 Hua Hong 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 Hua Hong Semiconductor, you can compare the effects of market volatilities on Diamyd Medical and Hua Hong 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 Hua Hong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Diamyd Medical and Hua Hong.
Diversification Opportunities for Diamyd Medical and Hua Hong
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Diamyd and Hua is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Diamyd Medical AB and Hua Hong Semiconductor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hua Hong Semiconductor 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 Hua Hong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hua Hong Semiconductor has no effect on the direction of Diamyd Medical i.e., Diamyd Medical and Hua Hong go up and down completely randomly.
Pair Corralation between Diamyd Medical and Hua Hong
Assuming the 90 days horizon Diamyd Medical is expected to generate 15.57 times less return on investment than Hua Hong. In addition to that, Diamyd Medical is 1.02 times more volatile than Hua Hong Semiconductor. It trades about 0.01 of its total potential returns per unit of risk. Hua Hong Semiconductor is currently generating about 0.21 per unit of volatility. If you would invest 248.00 in Hua Hong Semiconductor on November 4, 2024 and sell it today you would earn a total of 32.00 from holding Hua Hong Semiconductor or generate 12.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Diamyd Medical AB vs. Hua Hong Semiconductor
Performance |
| Timeline |
| Diamyd Medical AB |
| Hua Hong Semiconductor |
Diamyd Medical and Hua Hong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Diamyd Medical and Hua Hong
The main advantage of trading using opposite Diamyd Medical and Hua Hong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Diamyd Medical position performs unexpectedly, Hua Hong 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 Hua Hong will offset losses from the drop in Hua Hong's long position.| Diamyd Medical vs. Charter Communications | Diamyd Medical vs. STORE ELECTRONIC | Diamyd Medical vs. Hemisphere Energy Corp | Diamyd Medical vs. ecotel communication ag |
| Hua Hong vs. PLAYMATES TOYS | Hua Hong vs. QINGCI GAMES INC | Hua Hong vs. Tower Semiconductor | Hua Hong vs. ON SEMICONDUCTOR |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
Other Complementary Tools
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device |