Correlation Between Diamyd Medical and ETFS Coffee
Can any of the company-specific risk be diversified away by investing in both Diamyd Medical and ETFS Coffee 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 ETFS Coffee 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 ETFS Coffee ETC, you can compare the effects of market volatilities on Diamyd Medical and ETFS Coffee 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 ETFS Coffee. Check out your portfolio center. Please also check ongoing floating volatility patterns of Diamyd Medical and ETFS Coffee.
Diversification Opportunities for Diamyd Medical and ETFS Coffee
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Diamyd and ETFS is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Diamyd Medical AB and ETFS Coffee ETC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ETFS Coffee ETC 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 ETFS Coffee. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ETFS Coffee ETC has no effect on the direction of Diamyd Medical i.e., Diamyd Medical and ETFS Coffee go up and down completely randomly.
Pair Corralation between Diamyd Medical and ETFS Coffee
Assuming the 90 days horizon Diamyd Medical is expected to generate 1.86 times less return on investment than ETFS Coffee. In addition to that, Diamyd Medical is 2.15 times more volatile than ETFS Coffee ETC. It trades about 0.04 of its total potential returns per unit of risk. ETFS Coffee ETC is currently generating about 0.16 per unit of volatility. If you would invest 3,464 in ETFS Coffee ETC on September 3, 2024 and sell it today you would earn a total of 1,795 from holding ETFS Coffee ETC or generate 51.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 96.9% |
| Values | Daily Returns |
Diamyd Medical AB vs. ETFS Coffee ETC
Performance |
| Timeline |
| Diamyd Medical AB |
| ETFS Coffee ETC |
Diamyd Medical and ETFS Coffee Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Diamyd Medical and ETFS Coffee
The main advantage of trading using opposite Diamyd Medical and ETFS Coffee positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Diamyd Medical position performs unexpectedly, ETFS Coffee 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 ETFS Coffee will offset losses from the drop in ETFS Coffee's long position.| Diamyd Medical vs. WIMFARM SA EO | Diamyd Medical vs. Tencent Music Entertainment | Diamyd Medical vs. ULTRA CLEAN HLDGS | Diamyd Medical vs. AGRICULTBK HADR25 YC |
| ETFS Coffee vs. Apple Inc | ETFS Coffee vs. Apple Inc | ETFS Coffee vs. Apple Inc | ETFS Coffee 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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