Correlation Between Diamyd Medical and MeVis Medical
Can any of the company-specific risk be diversified away by investing in both Diamyd Medical and MeVis Medical 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 MeVis Medical 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 MeVis Medical Solutions, you can compare the effects of market volatilities on Diamyd Medical and MeVis Medical 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 MeVis Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Diamyd Medical and MeVis Medical.
Diversification Opportunities for Diamyd Medical and MeVis Medical
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Diamyd and MeVis is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Diamyd Medical AB and MeVis Medical Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MeVis Medical Solutions 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 MeVis Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MeVis Medical Solutions has no effect on the direction of Diamyd Medical i.e., Diamyd Medical and MeVis Medical go up and down completely randomly.
Pair Corralation between Diamyd Medical and MeVis Medical
Assuming the 90 days horizon Diamyd Medical AB is expected to generate 5.13 times more return on investment than MeVis Medical. However, Diamyd Medical is 5.13 times more volatile than MeVis Medical Solutions. It trades about 0.01 of its potential returns per unit of risk. MeVis Medical Solutions is currently generating about 0.0 per unit of risk. If you would invest 108.00 in Diamyd Medical AB on August 31, 2024 and sell it today you would lose (1.00) from holding Diamyd Medical AB or give up 0.93% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Diamyd Medical AB vs. MeVis Medical Solutions
Performance |
| Timeline |
| Diamyd Medical AB |
| MeVis Medical Solutions |
Diamyd Medical and MeVis Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Diamyd Medical and MeVis Medical
The main advantage of trading using opposite Diamyd Medical and MeVis Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Diamyd Medical position performs unexpectedly, MeVis Medical 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 MeVis Medical will offset losses from the drop in MeVis Medical's long position.| Diamyd Medical vs. Moderna | Diamyd Medical vs. Superior Plus Corp | Diamyd Medical vs. NMI Holdings | Diamyd Medical vs. Origin Agritech |
| MeVis Medical vs. Apple Inc | MeVis Medical vs. Apple Inc | MeVis Medical vs. Apple Inc | MeVis Medical vs. Apple Inc |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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