Correlation Between Diamyd Medical and MBANK (BRUSG)
Can any of the company-specific risk be diversified away by investing in both Diamyd Medical and MBANK (BRUSG) 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 MBANK (BRUSG) 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 MBANK, you can compare the effects of market volatilities on Diamyd Medical and MBANK (BRUSG) 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 MBANK (BRUSG). Check out your portfolio center. Please also check ongoing floating volatility patterns of Diamyd Medical and MBANK (BRUSG).
Diversification Opportunities for Diamyd Medical and MBANK (BRUSG)
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Diamyd and MBANK is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Diamyd Medical AB and MBANK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MBANK (BRUSG) 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 MBANK (BRUSG). Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MBANK (BRUSG) has no effect on the direction of Diamyd Medical i.e., Diamyd Medical and MBANK (BRUSG) go up and down completely randomly.
Pair Corralation between Diamyd Medical and MBANK (BRUSG)
Assuming the 90 days horizon Diamyd Medical AB is expected to generate 2.27 times more return on investment than MBANK (BRUSG). However, Diamyd Medical is 2.27 times more volatile than MBANK. It trades about 0.29 of its potential returns per unit of risk. MBANK is currently generating about 0.09 per unit of risk. If you would invest 136.00 in Diamyd Medical AB on October 20, 2024 and sell it today you would earn a total of 24.00 from holding Diamyd Medical AB or generate 17.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Diamyd Medical AB vs. MBANK
Performance |
| Timeline |
| Diamyd Medical AB |
| MBANK (BRUSG) |
Diamyd Medical and MBANK (BRUSG) Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Diamyd Medical and MBANK (BRUSG)
The main advantage of trading using opposite Diamyd Medical and MBANK (BRUSG) positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Diamyd Medical position performs unexpectedly, MBANK (BRUSG) 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 MBANK (BRUSG) will offset losses from the drop in MBANK (BRUSG)'s long position.| Diamyd Medical vs. CLEAN ENERGY FUELS | Diamyd Medical vs. Forsys Metals Corp | Diamyd Medical vs. Ultra Clean Holdings | Diamyd Medical vs. CVW CLEANTECH INC |
| MBANK (BRUSG) vs. X FAB Silicon Foundries | MBANK (BRUSG) vs. Diamyd Medical AB | MBANK (BRUSG) vs. Sanyo Chemical Industries | MBANK (BRUSG) vs. TRI CHEMICAL LABORATINC |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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