Correlation Between Diamyd Medical and Lipum AB
Can any of the company-specific risk be diversified away by investing in both Diamyd Medical and Lipum AB 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 Lipum AB 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 Lipum AB, you can compare the effects of market volatilities on Diamyd Medical and Lipum AB 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 Lipum AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Diamyd Medical and Lipum AB.
Diversification Opportunities for Diamyd Medical and Lipum AB
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Diamyd and Lipum is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Diamyd Medical AB and Lipum AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lipum AB 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 Lipum AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lipum AB has no effect on the direction of Diamyd Medical i.e., Diamyd Medical and Lipum AB go up and down completely randomly.
Pair Corralation between Diamyd Medical and Lipum AB
Assuming the 90 days trading horizon Diamyd Medical AB is expected to generate 0.92 times more return on investment than Lipum AB. However, Diamyd Medical AB is 1.09 times less risky than Lipum AB. It trades about 0.16 of its potential returns per unit of risk. Lipum AB is currently generating about -0.02 per unit of risk. If you would invest 1,456 in Diamyd Medical AB on November 2, 2024 and sell it today you would earn a total of 280.00 from holding Diamyd Medical AB or generate 19.23% 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. Lipum AB
Performance |
| Timeline |
| Diamyd Medical AB |
| Lipum AB |
Diamyd Medical and Lipum AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Diamyd Medical and Lipum AB
The main advantage of trading using opposite Diamyd Medical and Lipum AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Diamyd Medical position performs unexpectedly, Lipum AB 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 Lipum AB will offset losses from the drop in Lipum AB's long position.| Diamyd Medical vs. Cantargia AB | Diamyd Medical vs. Hansa Biopharma AB | Diamyd Medical vs. Saniona AB | Diamyd Medical vs. Mendus AB |
| Lipum AB vs. Ascelia Pharma AB | Lipum AB vs. NextCell Pharma AB | Lipum AB vs. Annexin Pharmaceuticals AB | Lipum AB vs. AlzeCure Pharma |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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