Correlation Between Diamyd Medical and 5TH PLANET
Can any of the company-specific risk be diversified away by investing in both Diamyd Medical and 5TH PLANET 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 5TH PLANET 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 5TH PLANET GAMES, you can compare the effects of market volatilities on Diamyd Medical and 5TH PLANET 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 5TH PLANET. Check out your portfolio center. Please also check ongoing floating volatility patterns of Diamyd Medical and 5TH PLANET.
Diversification Opportunities for Diamyd Medical and 5TH PLANET
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Diamyd and 5TH is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Diamyd Medical AB and 5TH PLANET GAMES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 5TH PLANET GAMES 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 5TH PLANET. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 5TH PLANET GAMES has no effect on the direction of Diamyd Medical i.e., Diamyd Medical and 5TH PLANET go up and down completely randomly.
Pair Corralation between Diamyd Medical and 5TH PLANET
Assuming the 90 days horizon Diamyd Medical AB is expected to generate 0.77 times more return on investment than 5TH PLANET. However, Diamyd Medical AB is 1.31 times less risky than 5TH PLANET. It trades about 0.25 of its potential returns per unit of risk. 5TH PLANET GAMES is currently generating about 0.0 per unit of risk. If you would invest 103.00 in Diamyd Medical AB on September 20, 2024 and sell it today you would earn a total of 31.00 from holding Diamyd Medical AB or generate 30.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Diamyd Medical AB vs. 5TH PLANET GAMES
Performance |
| Timeline |
| Diamyd Medical AB |
| 5TH PLANET GAMES |
Diamyd Medical and 5TH PLANET Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Diamyd Medical and 5TH PLANET
The main advantage of trading using opposite Diamyd Medical and 5TH PLANET positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Diamyd Medical position performs unexpectedly, 5TH PLANET 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 5TH PLANET will offset losses from the drop in 5TH PLANET's long position.| Diamyd Medical vs. Moderna | Diamyd Medical vs. Superior Plus Corp | Diamyd Medical vs. SIVERS SEMICONDUCTORS AB | Diamyd Medical vs. NorAm Drilling AS |
| 5TH PLANET vs. NEXON Co | 5TH PLANET vs. Take Two Interactive Software | 5TH PLANET vs. Superior Plus Corp | 5TH PLANET vs. SIVERS SEMICONDUCTORS AB |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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