Correlation Between Diamyd Medical and Virtus Investment
Can any of the company-specific risk be diversified away by investing in both Diamyd Medical and Virtus Investment 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 Virtus Investment 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 Virtus Investment Partners, you can compare the effects of market volatilities on Diamyd Medical and Virtus Investment 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 Virtus Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Diamyd Medical and Virtus Investment.
Diversification Opportunities for Diamyd Medical and Virtus Investment
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Diamyd and Virtus is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Diamyd Medical AB and Virtus Investment Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Virtus Investment 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 Virtus Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Virtus Investment has no effect on the direction of Diamyd Medical i.e., Diamyd Medical and Virtus Investment go up and down completely randomly.
Pair Corralation between Diamyd Medical and Virtus Investment
Assuming the 90 days horizon Diamyd Medical AB is expected to under-perform the Virtus Investment. In addition to that, Diamyd Medical is 1.14 times more volatile than Virtus Investment Partners. It trades about -0.11 of its total potential returns per unit of risk. Virtus Investment Partners is currently generating about 0.32 per unit of volatility. If you would invest 18,990 in Virtus Investment Partners on August 29, 2024 and sell it today you would earn a total of 4,210 from holding Virtus Investment Partners or generate 22.17% 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. Virtus Investment Partners
Performance |
| Timeline |
| Diamyd Medical AB |
| Virtus Investment |
Diamyd Medical and Virtus Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Diamyd Medical and Virtus Investment
The main advantage of trading using opposite Diamyd Medical and Virtus Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Diamyd Medical position performs unexpectedly, Virtus Investment 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 Virtus Investment will offset losses from the drop in Virtus Investment's long position.| Diamyd Medical vs. Superior Plus Corp | Diamyd Medical vs. NMI Holdings | Diamyd Medical vs. Origin Agritech | Diamyd Medical vs. SIVERS SEMICONDUCTORS AB |
| Virtus Investment vs. Superior Plus Corp | Virtus Investment vs. NMI Holdings | Virtus Investment vs. Origin Agritech | Virtus Investment vs. SIVERS SEMICONDUCTORS AB |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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