Correlation Between Diamyd Medical and NorAm Drilling
Can any of the company-specific risk be diversified away by investing in both Diamyd Medical and NorAm Drilling 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 NorAm Drilling 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 NorAm Drilling AS, you can compare the effects of market volatilities on Diamyd Medical and NorAm Drilling 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 NorAm Drilling. Check out your portfolio center. Please also check ongoing floating volatility patterns of Diamyd Medical and NorAm Drilling.
Diversification Opportunities for Diamyd Medical and NorAm Drilling
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Diamyd and NorAm is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Diamyd Medical AB and NorAm Drilling AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NorAm Drilling AS 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 NorAm Drilling. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NorAm Drilling AS has no effect on the direction of Diamyd Medical i.e., Diamyd Medical and NorAm Drilling go up and down completely randomly.
Pair Corralation between Diamyd Medical and NorAm Drilling
Assuming the 90 days horizon Diamyd Medical AB is expected to generate 1.08 times more return on investment than NorAm Drilling. However, Diamyd Medical is 1.08 times more volatile than NorAm Drilling AS. It trades about 0.31 of its potential returns per unit of risk. NorAm Drilling AS is currently generating about 0.04 per unit of risk. If you would invest 131.00 in Diamyd Medical AB on October 13, 2024 and sell it today you would earn a total of 25.00 from holding Diamyd Medical AB or generate 19.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Diamyd Medical AB vs. NorAm Drilling AS
Performance |
| Timeline |
| Diamyd Medical AB |
| NorAm Drilling AS |
Diamyd Medical and NorAm Drilling Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Diamyd Medical and NorAm Drilling
The main advantage of trading using opposite Diamyd Medical and NorAm Drilling positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Diamyd Medical position performs unexpectedly, NorAm Drilling 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 NorAm Drilling will offset losses from the drop in NorAm Drilling's long position.| Diamyd Medical vs. TOWNSQUARE MEDIA INC | Diamyd Medical vs. PENN Entertainment | Diamyd Medical vs. GOODYEAR T RUBBER | Diamyd Medical vs. Ubisoft Entertainment SA |
| NorAm Drilling vs. Scientific Games | NorAm Drilling vs. Diamyd Medical AB | NorAm Drilling vs. Peijia Medical Limited | NorAm Drilling vs. Genertec Universal Medical |
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.
Other Complementary Tools
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals |