Correlation Between Galmed Pharmaceuticals and Affimed NV
Can any of the company-specific risk be diversified away by investing in both Galmed Pharmaceuticals and Affimed NV 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 Galmed Pharmaceuticals and Affimed NV into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Galmed Pharmaceuticals and Affimed NV, you can compare the effects of market volatilities on Galmed Pharmaceuticals and Affimed NV 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 Galmed Pharmaceuticals with a short position of Affimed NV. Check out your portfolio center. Please also check ongoing floating volatility patterns of Galmed Pharmaceuticals and Affimed NV.
Diversification Opportunities for Galmed Pharmaceuticals and Affimed NV
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Galmed and Affimed is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Galmed Pharmaceuticals and Affimed NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Affimed NV and Galmed Pharmaceuticals 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 Galmed Pharmaceuticals are associated (or correlated) with Affimed NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Affimed NV has no effect on the direction of Galmed Pharmaceuticals i.e., Galmed Pharmaceuticals and Affimed NV go up and down completely randomly.
Pair Corralation between Galmed Pharmaceuticals and Affimed NV
Given the investment horizon of 90 days Galmed Pharmaceuticals is expected to generate 3.41 times more return on investment than Affimed NV. However, Galmed Pharmaceuticals is 3.41 times more volatile than Affimed NV. It trades about 0.04 of its potential returns per unit of risk. Affimed NV is currently generating about -0.04 per unit of risk. If you would invest 476.00 in Galmed Pharmaceuticals on August 27, 2024 and sell it today you would lose (201.00) from holding Galmed Pharmaceuticals or give up 42.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Galmed Pharmaceuticals vs. Affimed NV
Performance |
| Timeline |
| Galmed Pharmaceuticals |
| Affimed NV |
Galmed Pharmaceuticals and Affimed NV Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Galmed Pharmaceuticals and Affimed NV
The main advantage of trading using opposite Galmed Pharmaceuticals and Affimed NV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Galmed Pharmaceuticals position performs unexpectedly, Affimed NV 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 Affimed NV will offset losses from the drop in Affimed NV's long position.| Galmed Pharmaceuticals vs. Affimed NV | Galmed Pharmaceuticals vs. Abeona Therapeutics | Galmed Pharmaceuticals vs. Akebia Ther | Galmed Pharmaceuticals vs. Kodiak Sciences |
| Affimed NV vs. Eliem Therapeutics | Affimed NV vs. HCW Biologics | Affimed NV vs. Scpharmaceuticals | Affimed NV vs. Milestone Pharmaceuticals |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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