Correlation Between Diamyd Medical and WESTLAKE CHEMICAL
Can any of the company-specific risk be diversified away by investing in both Diamyd Medical and WESTLAKE 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 WESTLAKE 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 WESTLAKE CHEMICAL, you can compare the effects of market volatilities on Diamyd Medical and WESTLAKE 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 WESTLAKE CHEMICAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Diamyd Medical and WESTLAKE CHEMICAL.
Diversification Opportunities for Diamyd Medical and WESTLAKE CHEMICAL
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Diamyd and WESTLAKE is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Diamyd Medical AB and WESTLAKE CHEMICAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WESTLAKE 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 WESTLAKE CHEMICAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WESTLAKE CHEMICAL has no effect on the direction of Diamyd Medical i.e., Diamyd Medical and WESTLAKE CHEMICAL go up and down completely randomly.
Pair Corralation between Diamyd Medical and WESTLAKE CHEMICAL
Assuming the 90 days horizon Diamyd Medical AB is expected to generate 2.83 times more return on investment than WESTLAKE CHEMICAL. However, Diamyd Medical is 2.83 times more volatile than WESTLAKE CHEMICAL. It trades about 0.05 of its potential returns per unit of risk. WESTLAKE CHEMICAL is currently generating about 0.02 per unit of risk. If you would invest 109.00 in Diamyd Medical AB on September 1, 2024 and sell it today you would earn a total of 3.00 from holding Diamyd Medical AB or generate 2.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Diamyd Medical AB vs. WESTLAKE CHEMICAL
Performance |
| Timeline |
| Diamyd Medical AB |
| WESTLAKE CHEMICAL |
Diamyd Medical and WESTLAKE CHEMICAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Diamyd Medical and WESTLAKE CHEMICAL
The main advantage of trading using opposite Diamyd Medical and WESTLAKE CHEMICAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Diamyd Medical position performs unexpectedly, WESTLAKE 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 WESTLAKE CHEMICAL will offset losses from the drop in WESTLAKE CHEMICAL's long position.| Diamyd Medical vs. DXC Technology Co | Diamyd Medical vs. Digilife Technologies Limited | Diamyd Medical vs. Amkor Technology | Diamyd Medical vs. GEAR4MUSIC LS 10 |
| WESTLAKE CHEMICAL vs. NTG Nordic Transport | WESTLAKE CHEMICAL vs. ALGOMA STEEL GROUP | WESTLAKE CHEMICAL vs. TITANIUM TRANSPORTGROUP | WESTLAKE CHEMICAL vs. RELIANCE STEEL AL |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
Other Complementary Tools
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes |