Correlation Between Diamyd Medical and Seaboard
Can any of the company-specific risk be diversified away by investing in both Diamyd Medical and Seaboard 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 Seaboard 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 Seaboard, you can compare the effects of market volatilities on Diamyd Medical and Seaboard 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 Seaboard. Check out your portfolio center. Please also check ongoing floating volatility patterns of Diamyd Medical and Seaboard.
Diversification Opportunities for Diamyd Medical and Seaboard
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Diamyd and Seaboard is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Diamyd Medical AB and Seaboard in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seaboard 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 Seaboard. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seaboard has no effect on the direction of Diamyd Medical i.e., Diamyd Medical and Seaboard go up and down completely randomly.
Pair Corralation between Diamyd Medical and Seaboard
Assuming the 90 days horizon Diamyd Medical AB is expected to generate 3.98 times more return on investment than Seaboard. However, Diamyd Medical is 3.98 times more volatile than Seaboard. It trades about 0.03 of its potential returns per unit of risk. Seaboard is currently generating about -0.04 per unit of risk. If you would invest 125.00 in Diamyd Medical AB on September 14, 2024 and sell it today you would earn a total of 5.00 from holding Diamyd Medical AB or generate 4.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Diamyd Medical AB vs. Seaboard
Performance |
| Timeline |
| Diamyd Medical AB |
| Seaboard |
Diamyd Medical and Seaboard Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Diamyd Medical and Seaboard
The main advantage of trading using opposite Diamyd Medical and Seaboard positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Diamyd Medical position performs unexpectedly, Seaboard 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 Seaboard will offset losses from the drop in Seaboard's long position.| Diamyd Medical vs. Moderna | Diamyd Medical vs. BioNTech SE | Diamyd Medical vs. Superior Plus Corp | Diamyd Medical vs. SIVERS SEMICONDUCTORS AB |
| Seaboard vs. DISTRICT METALS | Seaboard vs. Universal Entertainment | Seaboard vs. MCEWEN MINING INC | Seaboard vs. Seven West Media |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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