Correlation Between Japan Steel and Diamyd Medical
Can any of the company-specific risk be diversified away by investing in both Japan Steel 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 Japan Steel and Diamyd Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Japan Steel and Diamyd Medical AB, you can compare the effects of market volatilities on Japan Steel 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 Japan Steel with a short position of Diamyd Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Japan Steel and Diamyd Medical.
Diversification Opportunities for Japan Steel and Diamyd Medical
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Japan and Diamyd is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding The Japan Steel 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 Japan Steel 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 The Japan Steel 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 Japan Steel i.e., Japan Steel and Diamyd Medical go up and down completely randomly.
Pair Corralation between Japan Steel and Diamyd Medical
Assuming the 90 days horizon Japan Steel is expected to generate 7.45 times less return on investment than Diamyd Medical. But when comparing it to its historical volatility, The Japan Steel is 1.18 times less risky than Diamyd Medical. It trades about 0.02 of its potential returns per unit of risk. Diamyd Medical AB is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 110.00 in Diamyd Medical AB on November 7, 2024 and sell it today you would earn a total of 33.00 from holding Diamyd Medical AB or generate 30.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Japan Steel vs. Diamyd Medical AB
Performance |
| Timeline |
| Japan Steel |
| Diamyd Medical AB |
Japan Steel and Diamyd Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Japan Steel and Diamyd Medical
The main advantage of trading using opposite Japan Steel and Diamyd Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Japan Steel 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.| Japan Steel vs. AEON STORES | Japan Steel vs. CHAMPION IRON | Japan Steel vs. JIAHUA STORES | Japan Steel vs. BJs Wholesale Club |
| Diamyd Medical vs. SLR Investment Corp | Diamyd Medical vs. PPHE HOTEL GROUP | Diamyd Medical vs. INTERCONT HOTELS | Diamyd Medical vs. MidCap Financial Investment |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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