Correlation Between Diamyd Medical and ALGOMA STEEL
Can any of the company-specific risk be diversified away by investing in both Diamyd Medical and ALGOMA STEEL 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 ALGOMA STEEL 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 ALGOMA STEEL GROUP, you can compare the effects of market volatilities on Diamyd Medical and ALGOMA STEEL 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 ALGOMA STEEL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Diamyd Medical and ALGOMA STEEL.
Diversification Opportunities for Diamyd Medical and ALGOMA STEEL
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Diamyd and ALGOMA is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Diamyd Medical AB and ALGOMA STEEL GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ALGOMA STEEL 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 ALGOMA STEEL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ALGOMA STEEL GROUP has no effect on the direction of Diamyd Medical i.e., Diamyd Medical and ALGOMA STEEL go up and down completely randomly.
Pair Corralation between Diamyd Medical and ALGOMA STEEL
Assuming the 90 days horizon Diamyd Medical AB is expected to generate 2.22 times more return on investment than ALGOMA STEEL. However, Diamyd Medical is 2.22 times more volatile than ALGOMA STEEL GROUP. It trades about 0.03 of its potential returns per unit of risk. ALGOMA STEEL GROUP is currently generating about 0.04 per unit of risk. If you would invest 135.00 in Diamyd Medical AB on October 11, 2024 and sell it today you would earn a total of 18.00 from holding Diamyd Medical AB or generate 13.33% 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. ALGOMA STEEL GROUP
Performance |
| Timeline |
| Diamyd Medical AB |
| ALGOMA STEEL GROUP |
Diamyd Medical and ALGOMA STEEL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Diamyd Medical and ALGOMA STEEL
The main advantage of trading using opposite Diamyd Medical and ALGOMA STEEL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Diamyd Medical position performs unexpectedly, ALGOMA STEEL 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 ALGOMA STEEL will offset losses from the drop in ALGOMA STEEL's long position.| Diamyd Medical vs. Superior Plus Corp | Diamyd Medical vs. NMI Holdings | Diamyd Medical vs. SIVERS SEMICONDUCTORS AB | Diamyd Medical vs. Talanx AG |
| ALGOMA STEEL vs. Diamyd Medical AB | ALGOMA STEEL vs. SINGAPORE AIRLINES | ALGOMA STEEL vs. PEPTONIC MEDICAL | ALGOMA STEEL vs. CVR Medical Corp |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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