Correlation Between Diamyd Medical and SWISS WATER
Can any of the company-specific risk be diversified away by investing in both Diamyd Medical and SWISS WATER 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 SWISS WATER 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 SWISS WATER DECAFFCOFFEE, you can compare the effects of market volatilities on Diamyd Medical and SWISS WATER 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 SWISS WATER. Check out your portfolio center. Please also check ongoing floating volatility patterns of Diamyd Medical and SWISS WATER.
Diversification Opportunities for Diamyd Medical and SWISS WATER
-0.83 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Diamyd and SWISS is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Diamyd Medical AB and SWISS WATER DECAFFCOFFEE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SWISS WATER DECAFFCOFFEE 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 SWISS WATER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SWISS WATER DECAFFCOFFEE has no effect on the direction of Diamyd Medical i.e., Diamyd Medical and SWISS WATER go up and down completely randomly.
Pair Corralation between Diamyd Medical and SWISS WATER
Assuming the 90 days horizon Diamyd Medical is expected to generate 1.74 times less return on investment than SWISS WATER. In addition to that, Diamyd Medical is 1.81 times more volatile than SWISS WATER DECAFFCOFFEE. It trades about 0.05 of its total potential returns per unit of risk. SWISS WATER DECAFFCOFFEE is currently generating about 0.15 per unit of volatility. If you would invest 252.00 in SWISS WATER DECAFFCOFFEE on September 2, 2024 and sell it today you would earn a total of 20.00 from holding SWISS WATER DECAFFCOFFEE or generate 7.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Diamyd Medical AB vs. SWISS WATER DECAFFCOFFEE
Performance |
| Timeline |
| Diamyd Medical AB |
| SWISS WATER DECAFFCOFFEE |
Diamyd Medical and SWISS WATER Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Diamyd Medical and SWISS WATER
The main advantage of trading using opposite Diamyd Medical and SWISS WATER positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Diamyd Medical position performs unexpectedly, SWISS WATER 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 SWISS WATER will offset losses from the drop in SWISS WATER'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 |
| SWISS WATER vs. Molson Coors Beverage | SWISS WATER vs. Suntory Beverage Food | SWISS WATER vs. COSMOSTEEL HLDGS | SWISS WATER vs. Khiron Life Sciences |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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