Correlation Between Diamyd Medical and NextCell Pharma
Can any of the company-specific risk be diversified away by investing in both Diamyd Medical and NextCell Pharma 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 NextCell Pharma 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 NextCell Pharma AB, you can compare the effects of market volatilities on Diamyd Medical and NextCell Pharma 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 NextCell Pharma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Diamyd Medical and NextCell Pharma.
Diversification Opportunities for Diamyd Medical and NextCell Pharma
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Diamyd and NextCell is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Diamyd Medical AB and NextCell Pharma AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NextCell Pharma 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 NextCell Pharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NextCell Pharma AB has no effect on the direction of Diamyd Medical i.e., Diamyd Medical and NextCell Pharma go up and down completely randomly.
Pair Corralation between Diamyd Medical and NextCell Pharma
Assuming the 90 days trading horizon Diamyd Medical AB is expected to generate 0.41 times more return on investment than NextCell Pharma. However, Diamyd Medical AB is 2.42 times less risky than NextCell Pharma. It trades about 0.09 of its potential returns per unit of risk. NextCell Pharma AB is currently generating about 0.03 per unit of risk. If you would invest 741.00 in Diamyd Medical AB on October 21, 2024 and sell it today you would earn a total of 1,075 from holding Diamyd Medical AB or generate 145.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Diamyd Medical AB vs. NextCell Pharma AB
Performance |
| Timeline |
| Diamyd Medical AB |
| NextCell Pharma AB |
Diamyd Medical and NextCell Pharma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Diamyd Medical and NextCell Pharma
The main advantage of trading using opposite Diamyd Medical and NextCell Pharma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Diamyd Medical position performs unexpectedly, NextCell Pharma 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 NextCell Pharma will offset losses from the drop in NextCell Pharma's long position.| Diamyd Medical vs. Genovis AB | Diamyd Medical vs. Cantargia AB | Diamyd Medical vs. Intervacc AB | Diamyd Medical vs. C Rad AB |
| NextCell Pharma vs. Diamyd Medical AB | NextCell Pharma vs. Mendus AB | NextCell Pharma vs. Vicore Pharma Holding | NextCell Pharma vs. Immunovia publ 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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