Correlation Between Diamyd Medical and Beijing Media
Can any of the company-specific risk be diversified away by investing in both Diamyd Medical and Beijing Media 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 Beijing Media 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 Beijing Media, you can compare the effects of market volatilities on Diamyd Medical and Beijing Media 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 Beijing Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Diamyd Medical and Beijing Media.
Diversification Opportunities for Diamyd Medical and Beijing Media
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Diamyd and Beijing is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Diamyd Medical AB and Beijing Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beijing Media 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 Beijing Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beijing Media has no effect on the direction of Diamyd Medical i.e., Diamyd Medical and Beijing Media go up and down completely randomly.
Pair Corralation between Diamyd Medical and Beijing Media
Assuming the 90 days horizon Diamyd Medical AB is expected to under-perform the Beijing Media. But the stock apears to be less risky and, when comparing its historical volatility, Diamyd Medical AB is 1.0 times less risky than Beijing Media. The stock trades about -0.05 of its potential returns per unit of risk. The Beijing Media is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 3.35 in Beijing Media on September 3, 2024 and sell it today you would lose (0.15) from holding Beijing Media or give up 4.48% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Diamyd Medical AB vs. Beijing Media
Performance |
| Timeline |
| Diamyd Medical AB |
| Beijing Media |
Diamyd Medical and Beijing Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Diamyd Medical and Beijing Media
The main advantage of trading using opposite Diamyd Medical and Beijing Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Diamyd Medical position performs unexpectedly, Beijing Media 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 Beijing Media will offset losses from the drop in Beijing Media's long position.| Diamyd Medical vs. WIMFARM SA EO | Diamyd Medical vs. Tencent Music Entertainment | Diamyd Medical vs. ULTRA CLEAN HLDGS | Diamyd Medical vs. AGRICULTBK HADR25 YC |
| Beijing Media vs. MEDICAL FACILITIES NEW | Beijing Media vs. Avanos Medical | Beijing Media vs. Diamyd Medical AB | Beijing Media vs. FARO Technologies |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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