Correlation Between Diamyd Medical and Transport International
Can any of the company-specific risk be diversified away by investing in both Diamyd Medical and Transport International 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 Transport International 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 Transport International Holdings, you can compare the effects of market volatilities on Diamyd Medical and Transport International 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 Transport International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Diamyd Medical and Transport International.
Diversification Opportunities for Diamyd Medical and Transport International
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Diamyd and Transport is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Diamyd Medical AB and Transport International Holdin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transport International 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 Transport International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transport International has no effect on the direction of Diamyd Medical i.e., Diamyd Medical and Transport International go up and down completely randomly.
Pair Corralation between Diamyd Medical and Transport International
Assuming the 90 days horizon Diamyd Medical AB is expected to generate 2.54 times more return on investment than Transport International. However, Diamyd Medical is 2.54 times more volatile than Transport International Holdings. It trades about 0.03 of its potential returns per unit of risk. Transport International Holdings is currently generating about -0.02 per unit of risk. If you would invest 97.00 in Diamyd Medical AB on August 25, 2024 and sell it today you would earn a total of 2.00 from holding Diamyd Medical AB or generate 2.06% 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. Transport International Holdin
Performance |
| Timeline |
| Diamyd Medical AB |
| Transport International |
Diamyd Medical and Transport International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Diamyd Medical and Transport International
The main advantage of trading using opposite Diamyd Medical and Transport International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Diamyd Medical position performs unexpectedly, Transport International 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 Transport International will offset losses from the drop in Transport International's long position.| Diamyd Medical vs. CSL Limited | Diamyd Medical vs. Superior Plus Corp | Diamyd Medical vs. NMI Holdings | Diamyd Medical vs. Origin Agritech |
| Transport International vs. CRRC Limited | Transport International vs. Central Japan Railway | Transport International vs. Westinghouse Air Brake | Transport International vs. Superior Plus Corp |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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