Correlation Between KOBE STEEL and Diamyd Medical
Can any of the company-specific risk be diversified away by investing in both KOBE 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 KOBE 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 KOBE STEEL LTD and Diamyd Medical AB, you can compare the effects of market volatilities on KOBE 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 KOBE STEEL with a short position of Diamyd Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of KOBE STEEL and Diamyd Medical.
Diversification Opportunities for KOBE STEEL and Diamyd Medical
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between KOBE and Diamyd is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding KOBE STEEL LTD 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 KOBE 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 KOBE STEEL LTD 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 KOBE STEEL i.e., KOBE STEEL and Diamyd Medical go up and down completely randomly.
Pair Corralation between KOBE STEEL and Diamyd Medical
Assuming the 90 days trading horizon KOBE STEEL LTD is expected to generate 0.54 times more return on investment than Diamyd Medical. However, KOBE STEEL LTD is 1.86 times less risky than Diamyd Medical. It trades about 0.17 of its potential returns per unit of risk. Diamyd Medical AB is currently generating about -0.1 per unit of risk. If you would invest 969.00 in KOBE STEEL LTD on November 7, 2024 and sell it today you would earn a total of 49.00 from holding KOBE STEEL LTD or generate 5.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KOBE STEEL LTD vs. Diamyd Medical AB
Performance |
| Timeline |
| KOBE STEEL LTD |
| Diamyd Medical AB |
KOBE STEEL and Diamyd Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KOBE STEEL and Diamyd Medical
The main advantage of trading using opposite KOBE STEEL and Diamyd Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KOBE 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.| KOBE STEEL vs. Luckin Coffee | KOBE STEEL vs. Coffee Holding Co | KOBE STEEL vs. Delta Air Lines | KOBE STEEL vs. Norwegian Air Shuttle |
| 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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