Correlation Between Diamyd Medical and Cyber Security
Can any of the company-specific risk be diversified away by investing in both Diamyd Medical and Cyber Security 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 Cyber Security 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 Cyber Security 1, you can compare the effects of market volatilities on Diamyd Medical and Cyber Security 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 Cyber Security. Check out your portfolio center. Please also check ongoing floating volatility patterns of Diamyd Medical and Cyber Security.
Diversification Opportunities for Diamyd Medical and Cyber Security
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Diamyd and Cyber is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Diamyd Medical AB and Cyber Security 1 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cyber Security 1 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 Cyber Security. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cyber Security 1 has no effect on the direction of Diamyd Medical i.e., Diamyd Medical and Cyber Security go up and down completely randomly.
Pair Corralation between Diamyd Medical and Cyber Security
Assuming the 90 days trading horizon Diamyd Medical AB is expected to generate 1.04 times more return on investment than Cyber Security. However, Diamyd Medical is 1.04 times more volatile than Cyber Security 1. It trades about 0.1 of its potential returns per unit of risk. Cyber Security 1 is currently generating about 0.0 per unit of risk. If you would invest 664.00 in Diamyd Medical AB on October 26, 2024 and sell it today you would earn a total of 1,110 from holding Diamyd Medical AB or generate 167.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.63% |
| Values | Daily Returns |
Diamyd Medical AB vs. Cyber Security 1
Performance |
| Timeline |
| Diamyd Medical AB |
| Cyber Security 1 |
Diamyd Medical and Cyber Security Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Diamyd Medical and Cyber Security
The main advantage of trading using opposite Diamyd Medical and Cyber Security positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Diamyd Medical position performs unexpectedly, Cyber Security 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 Cyber Security will offset losses from the drop in Cyber Security's long position.| Diamyd Medical vs. Cantargia AB | Diamyd Medical vs. Hansa Biopharma AB | Diamyd Medical vs. Saniona AB | Diamyd Medical vs. Mendus 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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