Correlation Between Diamyd Medical and Transportadora
Can any of the company-specific risk be diversified away by investing in both Diamyd Medical and Transportadora 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 Transportadora 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 Transportadora de Gas, you can compare the effects of market volatilities on Diamyd Medical and Transportadora 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 Transportadora. Check out your portfolio center. Please also check ongoing floating volatility patterns of Diamyd Medical and Transportadora.
Diversification Opportunities for Diamyd Medical and Transportadora
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Diamyd and Transportadora is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Diamyd Medical AB and Transportadora de Gas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transportadora de Gas 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 Transportadora. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transportadora de Gas has no effect on the direction of Diamyd Medical i.e., Diamyd Medical and Transportadora go up and down completely randomly.
Pair Corralation between Diamyd Medical and Transportadora
Assuming the 90 days horizon Diamyd Medical is expected to generate 3.88 times less return on investment than Transportadora. In addition to that, Diamyd Medical is 1.25 times more volatile than Transportadora de Gas. It trades about 0.03 of its total potential returns per unit of risk. Transportadora de Gas is currently generating about 0.12 per unit of volatility. If you would invest 1,580 in Transportadora de Gas on August 25, 2024 and sell it today you would earn a total of 1,060 from holding Transportadora de Gas or generate 67.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Diamyd Medical AB vs. Transportadora de Gas
Performance |
| Timeline |
| Diamyd Medical AB |
| Transportadora de Gas |
Diamyd Medical and Transportadora Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Diamyd Medical and Transportadora
The main advantage of trading using opposite Diamyd Medical and Transportadora positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Diamyd Medical position performs unexpectedly, Transportadora 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 Transportadora will offset losses from the drop in Transportadora's long position.| Diamyd Medical vs. CSL Limited | Diamyd Medical vs. Superior Plus Corp | Diamyd Medical vs. NMI Holdings | Diamyd Medical vs. Origin Agritech |
| Transportadora vs. Apple Inc | Transportadora vs. Apple Inc | Transportadora vs. Apple Inc | Transportadora 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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