Correlation Between PTT Global and Diamyd Medical
Can any of the company-specific risk be diversified away by investing in both PTT Global 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 PTT Global and Diamyd Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PTT Global Chemical and Diamyd Medical AB, you can compare the effects of market volatilities on PTT Global 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 PTT Global with a short position of Diamyd Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of PTT Global and Diamyd Medical.
Diversification Opportunities for PTT Global and Diamyd Medical
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between PTT and Diamyd is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding PTT Global Chemical 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 PTT Global 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 PTT Global Chemical 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 PTT Global i.e., PTT Global and Diamyd Medical go up and down completely randomly.
Pair Corralation between PTT Global and Diamyd Medical
Assuming the 90 days trading horizon PTT Global Chemical is expected to under-perform the Diamyd Medical. But the stock apears to be less risky and, when comparing its historical volatility, PTT Global Chemical is 2.55 times less risky than Diamyd Medical. The stock trades about -0.34 of its potential returns per unit of risk. The Diamyd Medical AB is currently generating about 0.36 of returns per unit of risk over similar time horizon. If you would invest 95.00 in Diamyd Medical AB on September 25, 2024 and sell it today you would earn a total of 41.00 from holding Diamyd Medical AB or generate 43.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PTT Global Chemical vs. Diamyd Medical AB
Performance |
| Timeline |
| PTT Global Chemical |
| Diamyd Medical AB |
PTT Global and Diamyd Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PTT Global and Diamyd Medical
The main advantage of trading using opposite PTT Global and Diamyd Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PTT Global 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.The idea behind PTT Global Chemical and Diamyd Medical AB pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Diamyd Medical vs. INDO RAMA SYNTHETIC | Diamyd Medical vs. Quaker Chemical | Diamyd Medical vs. PTT Global Chemical | Diamyd Medical vs. XTANT MEDICAL HLDGS |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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