Correlation Between Diamyd Medical and AUSNUTRIA DAIRY
Can any of the company-specific risk be diversified away by investing in both Diamyd Medical and AUSNUTRIA DAIRY 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 AUSNUTRIA DAIRY 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 AUSNUTRIA DAIRY, you can compare the effects of market volatilities on Diamyd Medical and AUSNUTRIA DAIRY 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 AUSNUTRIA DAIRY. Check out your portfolio center. Please also check ongoing floating volatility patterns of Diamyd Medical and AUSNUTRIA DAIRY.
Diversification Opportunities for Diamyd Medical and AUSNUTRIA DAIRY
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Diamyd and AUSNUTRIA is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Diamyd Medical AB and AUSNUTRIA DAIRY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AUSNUTRIA DAIRY 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 AUSNUTRIA DAIRY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AUSNUTRIA DAIRY has no effect on the direction of Diamyd Medical i.e., Diamyd Medical and AUSNUTRIA DAIRY go up and down completely randomly.
Pair Corralation between Diamyd Medical and AUSNUTRIA DAIRY
Assuming the 90 days horizon Diamyd Medical AB is expected to generate 2.41 times more return on investment than AUSNUTRIA DAIRY. However, Diamyd Medical is 2.41 times more volatile than AUSNUTRIA DAIRY. It trades about 0.05 of its potential returns per unit of risk. AUSNUTRIA DAIRY is currently generating about -0.08 per unit of risk. If you would invest 115.00 in Diamyd Medical AB on September 24, 2024 and sell it today you would earn a total of 21.00 from holding Diamyd Medical AB or generate 18.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Diamyd Medical AB vs. AUSNUTRIA DAIRY
Performance |
| Timeline |
| Diamyd Medical AB |
| AUSNUTRIA DAIRY |
Diamyd Medical and AUSNUTRIA DAIRY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Diamyd Medical and AUSNUTRIA DAIRY
The main advantage of trading using opposite Diamyd Medical and AUSNUTRIA DAIRY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Diamyd Medical position performs unexpectedly, AUSNUTRIA DAIRY 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 AUSNUTRIA DAIRY will offset losses from the drop in AUSNUTRIA DAIRY's long position.| Diamyd Medical vs. Novo Nordisk AS | Diamyd Medical vs. CSL LTD SPONADR | Diamyd Medical vs. CSL Limited | Diamyd Medical vs. Mercedes Benz Group AG |
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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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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