Correlation Between Diamyd Medical and Avanos Medical
Can any of the company-specific risk be diversified away by investing in both Diamyd Medical and Avanos Medical 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 Avanos Medical 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 Avanos Medical, you can compare the effects of market volatilities on Diamyd Medical and Avanos Medical 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 Avanos Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Diamyd Medical and Avanos Medical.
Diversification Opportunities for Diamyd Medical and Avanos Medical
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Diamyd and Avanos is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Diamyd Medical AB and Avanos Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Avanos Medical 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 Avanos Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Avanos Medical has no effect on the direction of Diamyd Medical i.e., Diamyd Medical and Avanos Medical go up and down completely randomly.
Pair Corralation between Diamyd Medical and Avanos Medical
Assuming the 90 days horizon Diamyd Medical is expected to generate 67.84 times less return on investment than Avanos Medical. In addition to that, Diamyd Medical is 1.57 times more volatile than Avanos Medical. It trades about 0.0 of its total potential returns per unit of risk. Avanos Medical is currently generating about 0.11 per unit of volatility. If you would invest 1,690 in Avanos Medical on September 1, 2024 and sell it today you would earn a total of 100.00 from holding Avanos Medical or generate 5.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Diamyd Medical AB vs. Avanos Medical
Performance |
| Timeline |
| Diamyd Medical AB |
| Avanos Medical |
Diamyd Medical and Avanos Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Diamyd Medical and Avanos Medical
The main advantage of trading using opposite Diamyd Medical and Avanos Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Diamyd Medical position performs unexpectedly, Avanos Medical 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 Avanos Medical will offset losses from the drop in Avanos Medical's long position.| Diamyd Medical vs. DXC Technology Co | Diamyd Medical vs. Digilife Technologies Limited | Diamyd Medical vs. Amkor Technology | Diamyd Medical vs. GEAR4MUSIC LS 10 |
| Avanos Medical vs. Apple Inc | Avanos Medical vs. Apple Inc | Avanos Medical vs. Apple Inc | Avanos Medical vs. Apple Inc |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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