Correlation Between Diamyd Medical and NetSol Technologies
Can any of the company-specific risk be diversified away by investing in both Diamyd Medical and NetSol Technologies 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 NetSol Technologies 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 NetSol Technologies, you can compare the effects of market volatilities on Diamyd Medical and NetSol Technologies 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 NetSol Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Diamyd Medical and NetSol Technologies.
Diversification Opportunities for Diamyd Medical and NetSol Technologies
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Diamyd and NetSol is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Diamyd Medical AB and NetSol Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NetSol Technologies 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 NetSol Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NetSol Technologies has no effect on the direction of Diamyd Medical i.e., Diamyd Medical and NetSol Technologies go up and down completely randomly.
Pair Corralation between Diamyd Medical and NetSol Technologies
Assuming the 90 days horizon Diamyd Medical AB is expected to generate 1.1 times more return on investment than NetSol Technologies. However, Diamyd Medical is 1.1 times more volatile than NetSol Technologies. It trades about -0.11 of its potential returns per unit of risk. NetSol Technologies is currently generating about -0.22 per unit of risk. If you would invest 109.00 in Diamyd Medical AB on August 29, 2024 and sell it today you would lose (10.00) from holding Diamyd Medical AB or give up 9.17% 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. NetSol Technologies
Performance |
| Timeline |
| Diamyd Medical AB |
| NetSol Technologies |
Diamyd Medical and NetSol Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Diamyd Medical and NetSol Technologies
The main advantage of trading using opposite Diamyd Medical and NetSol Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Diamyd Medical position performs unexpectedly, NetSol Technologies 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 NetSol Technologies will offset losses from the drop in NetSol Technologies' long position.| Diamyd Medical vs. Superior Plus Corp | Diamyd Medical vs. NMI Holdings | Diamyd Medical vs. Origin Agritech | Diamyd Medical vs. SIVERS SEMICONDUCTORS AB |
| NetSol Technologies vs. Ross Stores | NetSol Technologies vs. CHEMICAL INDUSTRIES | NetSol Technologies vs. Mitsubishi Gas Chemical | NetSol Technologies vs. Siamgas And Petrochemicals |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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