Correlation Between LIFE Old and DiaMedica Therapeutics
Can any of the company-specific risk be diversified away by investing in both LIFE Old and DiaMedica Therapeutics 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 LIFE Old and DiaMedica Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LIFE Old and DiaMedica Therapeutics, you can compare the effects of market volatilities on LIFE Old and DiaMedica Therapeutics 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 LIFE Old with a short position of DiaMedica Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of LIFE Old and DiaMedica Therapeutics.
Diversification Opportunities for LIFE Old and DiaMedica Therapeutics
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between LIFE and DiaMedica is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding LIFE Old and DiaMedica Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DiaMedica Therapeutics and LIFE Old 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 LIFE Old are associated (or correlated) with DiaMedica Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DiaMedica Therapeutics has no effect on the direction of LIFE Old i.e., LIFE Old and DiaMedica Therapeutics go up and down completely randomly.
Pair Corralation between LIFE Old and DiaMedica Therapeutics
If you would invest 551.00 in DiaMedica Therapeutics on November 2, 2024 and sell it today you would earn a total of 34.00 from holding DiaMedica Therapeutics or generate 6.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
LIFE Old vs. DiaMedica Therapeutics
Performance |
| Timeline |
| LIFE Old |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| DiaMedica Therapeutics |
LIFE Old and DiaMedica Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LIFE Old and DiaMedica Therapeutics
The main advantage of trading using opposite LIFE Old and DiaMedica Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LIFE Old position performs unexpectedly, DiaMedica Therapeutics 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 DiaMedica Therapeutics will offset losses from the drop in DiaMedica Therapeutics' long position.| LIFE Old vs. Mereo BioPharma Group | LIFE Old vs. Terns Pharmaceuticals | LIFE Old vs. PDS Biotechnology Corp | LIFE Old vs. Inozyme Pharma |
| DiaMedica Therapeutics vs. Milestone Pharmaceuticals | DiaMedica Therapeutics vs. Seres Therapeutics | DiaMedica Therapeutics vs. Inhibikase Therapeutics | DiaMedica Therapeutics vs. Oncolytics Biotech |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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