Correlation Between Diamyd Medical and SENECA FOODS-A
Can any of the company-specific risk be diversified away by investing in both Diamyd Medical and SENECA FOODS-A 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 SENECA FOODS-A 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 SENECA FOODS A, you can compare the effects of market volatilities on Diamyd Medical and SENECA FOODS-A 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 SENECA FOODS-A. Check out your portfolio center. Please also check ongoing floating volatility patterns of Diamyd Medical and SENECA FOODS-A.
Diversification Opportunities for Diamyd Medical and SENECA FOODS-A
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Diamyd and SENECA is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Diamyd Medical AB and SENECA FOODS A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SENECA FOODS A 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 SENECA FOODS-A. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SENECA FOODS A has no effect on the direction of Diamyd Medical i.e., Diamyd Medical and SENECA FOODS-A go up and down completely randomly.
Pair Corralation between Diamyd Medical and SENECA FOODS-A
Assuming the 90 days horizon Diamyd Medical AB is expected to generate 2.11 times more return on investment than SENECA FOODS-A. However, Diamyd Medical is 2.11 times more volatile than SENECA FOODS A. It trades about 0.04 of its potential returns per unit of risk. SENECA FOODS A is currently generating about 0.08 per unit of risk. If you would invest 97.00 in Diamyd Medical AB on September 1, 2024 and sell it today you would earn a total of 10.00 from holding Diamyd Medical AB or generate 10.31% 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. SENECA FOODS A
Performance |
| Timeline |
| Diamyd Medical AB |
| SENECA FOODS A |
Diamyd Medical and SENECA FOODS-A Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Diamyd Medical and SENECA FOODS-A
The main advantage of trading using opposite Diamyd Medical and SENECA FOODS-A positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Diamyd Medical position performs unexpectedly, SENECA FOODS-A 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 SENECA FOODS-A will offset losses from the drop in SENECA FOODS-A'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 |
| SENECA FOODS-A vs. SIVERS SEMICONDUCTORS AB | SENECA FOODS-A vs. Darden Restaurants | SENECA FOODS-A vs. Reliance Steel Aluminum | SENECA FOODS-A vs. Q2M Managementberatung AG |
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.
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