Correlation Between Diamyd Medical and ENTAIN PLC
Can any of the company-specific risk be diversified away by investing in both Diamyd Medical and ENTAIN PLC 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 ENTAIN PLC 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 ENTAIN PLC UNSPADR1, you can compare the effects of market volatilities on Diamyd Medical and ENTAIN PLC 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 ENTAIN PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Diamyd Medical and ENTAIN PLC.
Diversification Opportunities for Diamyd Medical and ENTAIN PLC
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Diamyd and ENTAIN is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Diamyd Medical AB and ENTAIN PLC UNSPADR1 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ENTAIN PLC UNSPADR1 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 ENTAIN PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ENTAIN PLC UNSPADR1 has no effect on the direction of Diamyd Medical i.e., Diamyd Medical and ENTAIN PLC go up and down completely randomly.
Pair Corralation between Diamyd Medical and ENTAIN PLC
Assuming the 90 days horizon Diamyd Medical AB is expected to generate 1.68 times more return on investment than ENTAIN PLC. However, Diamyd Medical is 1.68 times more volatile than ENTAIN PLC UNSPADR1. It trades about 0.05 of its potential returns per unit of risk. ENTAIN PLC UNSPADR1 is currently generating about -0.02 per unit of risk. If you would invest 66.00 in Diamyd Medical AB on August 31, 2024 and sell it today you would earn a total of 41.00 from holding Diamyd Medical AB or generate 62.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Diamyd Medical AB vs. ENTAIN PLC UNSPADR1
Performance |
| Timeline |
| Diamyd Medical AB |
| ENTAIN PLC UNSPADR1 |
Diamyd Medical and ENTAIN PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Diamyd Medical and ENTAIN PLC
The main advantage of trading using opposite Diamyd Medical and ENTAIN PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Diamyd Medical position performs unexpectedly, ENTAIN PLC 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 ENTAIN PLC will offset losses from the drop in ENTAIN PLC's long position.| Diamyd Medical vs. Superior Plus Corp | Diamyd Medical vs. NMI Holdings | Diamyd Medical vs. Origin Agritech | Diamyd Medical vs. SIVERS SEMICONDUCTORS AB |
| ENTAIN PLC vs. CompuGroup Medical SE | ENTAIN PLC vs. Diamyd Medical AB | ENTAIN PLC vs. Apollo Medical Holdings | ENTAIN PLC vs. Canadian Utilities Limited |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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