Correlation Between Diamyd Medical and 24SEVENOFFICE GROUP
Can any of the company-specific risk be diversified away by investing in both Diamyd Medical and 24SEVENOFFICE GROUP 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 24SEVENOFFICE GROUP 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 24SEVENOFFICE GROUP AB, you can compare the effects of market volatilities on Diamyd Medical and 24SEVENOFFICE GROUP 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 24SEVENOFFICE GROUP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Diamyd Medical and 24SEVENOFFICE GROUP.
Diversification Opportunities for Diamyd Medical and 24SEVENOFFICE GROUP
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Diamyd and 24SEVENOFFICE is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Diamyd Medical AB and 24SEVENOFFICE GROUP AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 24SEVENOFFICE GROUP 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 24SEVENOFFICE GROUP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 24SEVENOFFICE GROUP has no effect on the direction of Diamyd Medical i.e., Diamyd Medical and 24SEVENOFFICE GROUP go up and down completely randomly.
Pair Corralation between Diamyd Medical and 24SEVENOFFICE GROUP
Assuming the 90 days horizon Diamyd Medical AB is expected to generate 2.93 times more return on investment than 24SEVENOFFICE GROUP. However, Diamyd Medical is 2.93 times more volatile than 24SEVENOFFICE GROUP AB. It trades about 0.14 of its potential returns per unit of risk. 24SEVENOFFICE GROUP AB is currently generating about 0.26 per unit of risk. If you would invest 135.00 in Diamyd Medical AB on October 10, 2024 and sell it today you would earn a total of 10.00 from holding Diamyd Medical AB or generate 7.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Diamyd Medical AB vs. 24SEVENOFFICE GROUP AB
Performance |
| Timeline |
| Diamyd Medical AB |
| 24SEVENOFFICE GROUP |
Diamyd Medical and 24SEVENOFFICE GROUP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Diamyd Medical and 24SEVENOFFICE GROUP
The main advantage of trading using opposite Diamyd Medical and 24SEVENOFFICE GROUP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Diamyd Medical position performs unexpectedly, 24SEVENOFFICE GROUP 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 24SEVENOFFICE GROUP will offset losses from the drop in 24SEVENOFFICE GROUP's long position.| Diamyd Medical vs. American Public Education | Diamyd Medical vs. Alfa Financial Software | Diamyd Medical vs. VIVA WINE GROUP | Diamyd Medical vs. Easy Software AG |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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