Correlation Between Diamyd Medical and HF FOODS
Can any of the company-specific risk be diversified away by investing in both Diamyd Medical and HF FOODS 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 HF FOODS 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 HF FOODS GRP, you can compare the effects of market volatilities on Diamyd Medical and HF FOODS 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 HF FOODS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Diamyd Medical and HF FOODS.
Diversification Opportunities for Diamyd Medical and HF FOODS
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Diamyd and 3GX is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Diamyd Medical AB and HF FOODS GRP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HF FOODS GRP 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 HF FOODS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HF FOODS GRP has no effect on the direction of Diamyd Medical i.e., Diamyd Medical and HF FOODS go up and down completely randomly.
Pair Corralation between Diamyd Medical and HF FOODS
Assuming the 90 days horizon Diamyd Medical is expected to generate 1.05 times less return on investment than HF FOODS. In addition to that, Diamyd Medical is 1.19 times more volatile than HF FOODS GRP. It trades about 0.02 of its total potential returns per unit of risk. HF FOODS GRP is currently generating about 0.02 per unit of volatility. If you would invest 338.00 in HF FOODS GRP on September 1, 2024 and sell it today you would earn a total of 2.00 from holding HF FOODS GRP or generate 0.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.48% |
| Values | Daily Returns |
Diamyd Medical AB vs. HF FOODS GRP
Performance |
| Timeline |
| Diamyd Medical AB |
| HF FOODS GRP |
Diamyd Medical and HF FOODS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Diamyd Medical and HF FOODS
The main advantage of trading using opposite Diamyd Medical and HF FOODS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Diamyd Medical position performs unexpectedly, HF FOODS 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 HF FOODS will offset losses from the drop in HF FOODS's long position.| Diamyd Medical vs. DXC Technology Co | Diamyd Medical vs. Digilife Technologies Limited | Diamyd Medical vs. Amkor Technology | Diamyd Medical vs. GEAR4MUSIC LS 10 |
| HF FOODS vs. Playtech plc | HF FOODS vs. Perdoceo Education | HF FOODS vs. DeVry Education Group | HF FOODS vs. Xinhua Winshare Publishing |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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