Correlation Between Diamyd Medical and Quaker Chemical
Can any of the company-specific risk be diversified away by investing in both Diamyd Medical and Quaker Chemical 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 Quaker Chemical 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 Quaker Chemical, you can compare the effects of market volatilities on Diamyd Medical and Quaker Chemical 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 Quaker Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Diamyd Medical and Quaker Chemical.
Diversification Opportunities for Diamyd Medical and Quaker Chemical
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Diamyd and Quaker is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Diamyd Medical AB and Quaker Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quaker Chemical 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 Quaker Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Quaker Chemical has no effect on the direction of Diamyd Medical i.e., Diamyd Medical and Quaker Chemical go up and down completely randomly.
Pair Corralation between Diamyd Medical and Quaker Chemical
Assuming the 90 days horizon Diamyd Medical AB is expected to generate 3.51 times more return on investment than Quaker Chemical. However, Diamyd Medical is 3.51 times more volatile than Quaker Chemical. It trades about 0.28 of its potential returns per unit of risk. Quaker Chemical is currently generating about -0.23 per unit of risk. If you would invest 103.00 in Diamyd Medical AB on September 20, 2024 and sell it today you would earn a total of 36.00 from holding Diamyd Medical AB or generate 34.95% 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. Quaker Chemical
Performance |
| Timeline |
| Diamyd Medical AB |
| Quaker Chemical |
Diamyd Medical and Quaker Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Diamyd Medical and Quaker Chemical
The main advantage of trading using opposite Diamyd Medical and Quaker Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Diamyd Medical position performs unexpectedly, Quaker Chemical 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 Quaker Chemical will offset losses from the drop in Quaker Chemical's long position.| Diamyd Medical vs. Moderna | Diamyd Medical vs. Superior Plus Corp | Diamyd Medical vs. SIVERS SEMICONDUCTORS AB | Diamyd Medical vs. NorAm Drilling AS |
| Quaker Chemical vs. International Consolidated Airlines | Quaker Chemical vs. Nok Airlines PCL | Quaker Chemical vs. ANTA SPORTS PRODUCT | Quaker Chemical vs. EPSILON HEALTHCARE LTD |
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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