Correlation Between Diamyd Medical and CIFI Holdings
Can any of the company-specific risk be diversified away by investing in both Diamyd Medical and CIFI 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 CIFI 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 CIFI Holdings Co, you can compare the effects of market volatilities on Diamyd Medical and CIFI 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 CIFI Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Diamyd Medical and CIFI Holdings.
Diversification Opportunities for Diamyd Medical and CIFI Holdings
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Diamyd and CIFI is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Diamyd Medical AB and CIFI Holdings Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CIFI 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 CIFI Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CIFI Holdings has no effect on the direction of Diamyd Medical i.e., Diamyd Medical and CIFI Holdings go up and down completely randomly.
Pair Corralation between Diamyd Medical and CIFI Holdings
Assuming the 90 days horizon Diamyd Medical AB is expected to generate 1.35 times more return on investment than CIFI Holdings. However, Diamyd Medical is 1.35 times more volatile than CIFI Holdings Co. It trades about 0.26 of its potential returns per unit of risk. CIFI Holdings Co is currently generating about -0.17 per unit of risk. If you would invest 102.00 in Diamyd Medical AB on September 12, 2024 and sell it today you would earn a total of 33.00 from holding Diamyd Medical AB or generate 32.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Diamyd Medical AB vs. CIFI Holdings Co
Performance |
| Timeline |
| Diamyd Medical AB |
| CIFI Holdings |
Diamyd Medical and CIFI Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Diamyd Medical and CIFI Holdings
The main advantage of trading using opposite Diamyd Medical and CIFI Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Diamyd Medical position performs unexpectedly, CIFI 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 CIFI Holdings will offset losses from the drop in CIFI Holdings' long position.| Diamyd Medical vs. Moderna | Diamyd Medical vs. BioNTech SE | Diamyd Medical vs. Superior Plus Corp | Diamyd Medical vs. SIVERS SEMICONDUCTORS AB |
| CIFI Holdings vs. Canon Marketing Japan | CIFI Holdings vs. Fast Retailing Co | CIFI Holdings vs. Tradeweb Markets | CIFI Holdings vs. SIMS METAL MGT |
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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