Correlation Between Diamyd Medical and Deutsche Telekom
Can any of the company-specific risk be diversified away by investing in both Diamyd Medical and Deutsche Telekom 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 Deutsche Telekom 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 Deutsche Telekom AG, you can compare the effects of market volatilities on Diamyd Medical and Deutsche Telekom 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 Deutsche Telekom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Diamyd Medical and Deutsche Telekom.
Diversification Opportunities for Diamyd Medical and Deutsche Telekom
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Diamyd and Deutsche is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Diamyd Medical AB and Deutsche Telekom AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Deutsche Telekom 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 Deutsche Telekom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Deutsche Telekom has no effect on the direction of Diamyd Medical i.e., Diamyd Medical and Deutsche Telekom go up and down completely randomly.
Pair Corralation between Diamyd Medical and Deutsche Telekom
Assuming the 90 days horizon Diamyd Medical AB is expected to generate 6.34 times more return on investment than Deutsche Telekom. However, Diamyd Medical is 6.34 times more volatile than Deutsche Telekom AG. It trades about 0.06 of its potential returns per unit of risk. Deutsche Telekom AG is currently generating about 0.17 per unit of risk. If you would invest 73.00 in Diamyd Medical AB on September 12, 2024 and sell it today you would earn a total of 62.00 from holding Diamyd Medical AB or generate 84.93% 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. Deutsche Telekom AG
Performance |
| Timeline |
| Diamyd Medical AB |
| Deutsche Telekom |
Diamyd Medical and Deutsche Telekom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Diamyd Medical and Deutsche Telekom
The main advantage of trading using opposite Diamyd Medical and Deutsche Telekom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Diamyd Medical position performs unexpectedly, Deutsche Telekom 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 Deutsche Telekom will offset losses from the drop in Deutsche Telekom's long position.| Diamyd Medical vs. Moderna | Diamyd Medical vs. BioNTech SE | Diamyd Medical vs. Superior Plus Corp | Diamyd Medical vs. SIVERS SEMICONDUCTORS AB |
| Deutsche Telekom vs. SENECA FOODS A | Deutsche Telekom vs. SK TELECOM TDADR | Deutsche Telekom vs. United Natural Foods | Deutsche Telekom vs. INDOFOOD AGRI RES |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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