Correlation Between Diamyd Medical and ENEOS Holdings
Can any of the company-specific risk be diversified away by investing in both Diamyd Medical and ENEOS Holdings 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 ENEOS Holdings 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 ENEOS Holdings, you can compare the effects of market volatilities on Diamyd Medical and ENEOS Holdings 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 ENEOS Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Diamyd Medical and ENEOS Holdings.
Diversification Opportunities for Diamyd Medical and ENEOS Holdings
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Diamyd and ENEOS is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Diamyd Medical AB and ENEOS Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ENEOS Holdings 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 ENEOS Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ENEOS Holdings has no effect on the direction of Diamyd Medical i.e., Diamyd Medical and ENEOS Holdings go up and down completely randomly.
Pair Corralation between Diamyd Medical and ENEOS Holdings
Assuming the 90 days horizon Diamyd Medical is expected to generate 1.12 times less return on investment than ENEOS Holdings. In addition to that, Diamyd Medical is 1.95 times more volatile than ENEOS Holdings. It trades about 0.1 of its total potential returns per unit of risk. ENEOS Holdings is currently generating about 0.21 per unit of volatility. If you would invest 462.00 in ENEOS Holdings on September 5, 2024 and sell it today you would earn a total of 48.00 from holding ENEOS Holdings or generate 10.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Diamyd Medical AB vs. ENEOS Holdings
Performance |
| Timeline |
| Diamyd Medical AB |
| ENEOS Holdings |
Diamyd Medical and ENEOS Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Diamyd Medical and ENEOS Holdings
The main advantage of trading using opposite Diamyd Medical and ENEOS Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Diamyd Medical position performs unexpectedly, ENEOS Holdings 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 ENEOS Holdings will offset losses from the drop in ENEOS Holdings' long position.| Diamyd Medical vs. Nufarm Limited | Diamyd Medical vs. SOFI TECHNOLOGIES | Diamyd Medical vs. ACCSYS TECHPLC EO | Diamyd Medical vs. AAC TECHNOLOGHLDGADR |
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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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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