Correlation Between Diamyd Medical and SCANDMEDICAL SOLDK-040
Can any of the company-specific risk be diversified away by investing in both Diamyd Medical and SCANDMEDICAL SOLDK-040 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 SCANDMEDICAL SOLDK-040 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 SCANDMEDICAL SOLDK 040, you can compare the effects of market volatilities on Diamyd Medical and SCANDMEDICAL SOLDK-040 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 SCANDMEDICAL SOLDK-040. Check out your portfolio center. Please also check ongoing floating volatility patterns of Diamyd Medical and SCANDMEDICAL SOLDK-040.
Diversification Opportunities for Diamyd Medical and SCANDMEDICAL SOLDK-040
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Diamyd and SCANDMEDICAL is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Diamyd Medical AB and SCANDMEDICAL SOLDK 040 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SCANDMEDICAL SOLDK 040 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 SCANDMEDICAL SOLDK-040. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SCANDMEDICAL SOLDK 040 has no effect on the direction of Diamyd Medical i.e., Diamyd Medical and SCANDMEDICAL SOLDK-040 go up and down completely randomly.
Pair Corralation between Diamyd Medical and SCANDMEDICAL SOLDK-040
Assuming the 90 days horizon Diamyd Medical is expected to generate 85.18 times less return on investment than SCANDMEDICAL SOLDK-040. In addition to that, Diamyd Medical is 1.08 times more volatile than SCANDMEDICAL SOLDK 040. It trades about 0.0 of its total potential returns per unit of risk. SCANDMEDICAL SOLDK 040 is currently generating about 0.09 per unit of volatility. If you would invest 74.00 in SCANDMEDICAL SOLDK 040 on September 1, 2024 and sell it today you would earn a total of 5.00 from holding SCANDMEDICAL SOLDK 040 or generate 6.76% 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. SCANDMEDICAL SOLDK 040
Performance |
| Timeline |
| Diamyd Medical AB |
| SCANDMEDICAL SOLDK 040 |
Diamyd Medical and SCANDMEDICAL SOLDK-040 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Diamyd Medical and SCANDMEDICAL SOLDK-040
The main advantage of trading using opposite Diamyd Medical and SCANDMEDICAL SOLDK-040 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Diamyd Medical position performs unexpectedly, SCANDMEDICAL SOLDK-040 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 SCANDMEDICAL SOLDK-040 will offset losses from the drop in SCANDMEDICAL SOLDK-040's long position.| Diamyd Medical vs. DXC Technology Co | Diamyd Medical vs. Digilife Technologies Limited | Diamyd Medical vs. Amkor Technology | Diamyd Medical vs. GEAR4MUSIC LS 10 |
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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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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