Correlation Between Easy Software and Diamyd Medical
Can any of the company-specific risk be diversified away by investing in both Easy Software and Diamyd Medical 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 Easy Software and Diamyd Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Easy Software AG and Diamyd Medical AB, you can compare the effects of market volatilities on Easy Software and Diamyd Medical 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 Easy Software with a short position of Diamyd Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Easy Software and Diamyd Medical.
Diversification Opportunities for Easy Software and Diamyd Medical
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Easy and Diamyd is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Easy Software AG and Diamyd Medical AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Diamyd Medical AB and Easy Software 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 Easy Software AG are associated (or correlated) with Diamyd Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Diamyd Medical AB has no effect on the direction of Easy Software i.e., Easy Software and Diamyd Medical go up and down completely randomly.
Pair Corralation between Easy Software and Diamyd Medical
Assuming the 90 days trading horizon Easy Software AG is expected to generate 0.51 times more return on investment than Diamyd Medical. However, Easy Software AG is 1.97 times less risky than Diamyd Medical. It trades about 0.09 of its potential returns per unit of risk. Diamyd Medical AB is currently generating about 0.03 per unit of risk. If you would invest 1,450 in Easy Software AG on October 25, 2024 and sell it today you would earn a total of 350.00 from holding Easy Software AG or generate 24.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Easy Software AG vs. Diamyd Medical AB
Performance |
| Timeline |
| Easy Software AG |
| Diamyd Medical AB |
Easy Software and Diamyd Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Easy Software and Diamyd Medical
The main advantage of trading using opposite Easy Software and Diamyd Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Easy Software position performs unexpectedly, Diamyd Medical 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 Diamyd Medical will offset losses from the drop in Diamyd Medical's long position.| Easy Software vs. NXP Semiconductors NV | Easy Software vs. Ryanair Holdings plc | Easy Software vs. SEALED AIR | Easy Software vs. Corsair Gaming |
| Diamyd Medical vs. Easy Software AG | Diamyd Medical vs. Check Point Software | Diamyd Medical vs. FIRST SHIP LEASE | Diamyd Medical vs. United Rentals |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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