Correlation Between Diamyd Medical and SIDETRADE
Can any of the company-specific risk be diversified away by investing in both Diamyd Medical and SIDETRADE 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 SIDETRADE 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 SIDETRADE EO 1, you can compare the effects of market volatilities on Diamyd Medical and SIDETRADE 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 SIDETRADE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Diamyd Medical and SIDETRADE.
Diversification Opportunities for Diamyd Medical and SIDETRADE
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Diamyd and SIDETRADE is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Diamyd Medical AB and SIDETRADE EO 1 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SIDETRADE EO 1 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 SIDETRADE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SIDETRADE EO 1 has no effect on the direction of Diamyd Medical i.e., Diamyd Medical and SIDETRADE go up and down completely randomly.
Pair Corralation between Diamyd Medical and SIDETRADE
Assuming the 90 days horizon Diamyd Medical AB is expected to under-perform the SIDETRADE. In addition to that, Diamyd Medical is 2.46 times more volatile than SIDETRADE EO 1. It trades about -0.11 of its total potential returns per unit of risk. SIDETRADE EO 1 is currently generating about -0.01 per unit of volatility. If you would invest 22,600 in SIDETRADE EO 1 on August 29, 2024 and sell it today you would lose (100.00) from holding SIDETRADE EO 1 or give up 0.44% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Diamyd Medical AB vs. SIDETRADE EO 1
Performance |
| Timeline |
| Diamyd Medical AB |
| SIDETRADE EO 1 |
Diamyd Medical and SIDETRADE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Diamyd Medical and SIDETRADE
The main advantage of trading using opposite Diamyd Medical and SIDETRADE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Diamyd Medical position performs unexpectedly, SIDETRADE 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 SIDETRADE will offset losses from the drop in SIDETRADE'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 |
| SIDETRADE vs. Superior Plus Corp | SIDETRADE vs. NMI Holdings | SIDETRADE vs. Origin Agritech | SIDETRADE vs. SIVERS SEMICONDUCTORS AB |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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