Correlation Between Diamyd Medical and Clean Energy
Can any of the company-specific risk be diversified away by investing in both Diamyd Medical and Clean Energy 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 Clean Energy 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 Clean Energy Fuels, you can compare the effects of market volatilities on Diamyd Medical and Clean Energy 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 Clean Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Diamyd Medical and Clean Energy.
Diversification Opportunities for Diamyd Medical and Clean Energy
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Diamyd and Clean is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Diamyd Medical AB and Clean Energy Fuels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clean Energy Fuels 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 Clean Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clean Energy Fuels has no effect on the direction of Diamyd Medical i.e., Diamyd Medical and Clean Energy go up and down completely randomly.
Pair Corralation between Diamyd Medical and Clean Energy
Assuming the 90 days horizon Diamyd Medical AB is expected to under-perform the Clean Energy. But the stock apears to be less risky and, when comparing its historical volatility, Diamyd Medical AB is 1.41 times less risky than Clean Energy. The stock trades about -0.13 of its potential returns per unit of risk. The Clean Energy Fuels is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 253.00 in Clean Energy Fuels on August 25, 2024 and sell it today you would earn a total of 2.00 from holding Clean Energy Fuels or generate 0.79% 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. Clean Energy Fuels
Performance |
| Timeline |
| Diamyd Medical AB |
| Clean Energy Fuels |
Diamyd Medical and Clean Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Diamyd Medical and Clean Energy
The main advantage of trading using opposite Diamyd Medical and Clean Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Diamyd Medical position performs unexpectedly, Clean Energy 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 Clean Energy will offset losses from the drop in Clean Energy's long position.| Diamyd Medical vs. ASPEN TECHINC DL | Diamyd Medical vs. REGAL ASIAN INVESTMENTS | Diamyd Medical vs. Sunny Optical Technology | Diamyd Medical vs. CapitaLand Investment Limited |
| Clean Energy vs. Superior Plus Corp | Clean Energy vs. NMI Holdings | Clean Energy vs. Origin Agritech | Clean Energy 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
Other Complementary Tools
| CEOs Directory Screen CEOs from public companies around the world | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios |