Correlation Between Diamyd Medical and Hitachi Construction
Can any of the company-specific risk be diversified away by investing in both Diamyd Medical and Hitachi Construction 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 Hitachi Construction 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 Hitachi Construction Machinery, you can compare the effects of market volatilities on Diamyd Medical and Hitachi Construction 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 Hitachi Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Diamyd Medical and Hitachi Construction.
Diversification Opportunities for Diamyd Medical and Hitachi Construction
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Diamyd and Hitachi is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Diamyd Medical AB and Hitachi Construction Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hitachi Construction 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 Hitachi Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hitachi Construction has no effect on the direction of Diamyd Medical i.e., Diamyd Medical and Hitachi Construction go up and down completely randomly.
Pair Corralation between Diamyd Medical and Hitachi Construction
Assuming the 90 days horizon Diamyd Medical AB is expected to generate 2.49 times more return on investment than Hitachi Construction. However, Diamyd Medical is 2.49 times more volatile than Hitachi Construction Machinery. It trades about 0.22 of its potential returns per unit of risk. Hitachi Construction Machinery is currently generating about 0.15 per unit of risk. If you would invest 112.00 in Diamyd Medical AB on October 30, 2024 and sell it today you would earn a total of 39.00 from holding Diamyd Medical AB or generate 34.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Diamyd Medical AB vs. Hitachi Construction Machinery
Performance |
| Timeline |
| Diamyd Medical AB |
| Hitachi Construction |
Diamyd Medical and Hitachi Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Diamyd Medical and Hitachi Construction
The main advantage of trading using opposite Diamyd Medical and Hitachi Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Diamyd Medical position performs unexpectedly, Hitachi Construction 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 Hitachi Construction will offset losses from the drop in Hitachi Construction's long position.| Diamyd Medical vs. BioNTech SE | Diamyd Medical vs. Agilent Technologies | Diamyd Medical vs. PT Wintermar Offshore | Diamyd Medical vs. United Rentals |
| Hitachi Construction vs. Japan Medical Dynamic | Hitachi Construction vs. PEPTONIC MEDICAL | Hitachi Construction vs. NURAN WIRELESS INC | Hitachi Construction vs. KENEDIX OFFICE INV |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
Other Complementary Tools
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities |