Correlation Between FIRST SHIP and Diamyd Medical
Can any of the company-specific risk be diversified away by investing in both FIRST SHIP 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 FIRST SHIP and Diamyd Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FIRST SHIP LEASE and Diamyd Medical AB, you can compare the effects of market volatilities on FIRST SHIP 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 FIRST SHIP with a short position of Diamyd Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of FIRST SHIP and Diamyd Medical.
Diversification Opportunities for FIRST SHIP and Diamyd Medical
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between FIRST and Diamyd is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding FIRST SHIP LEASE 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 FIRST SHIP 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 FIRST SHIP LEASE 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 FIRST SHIP i.e., FIRST SHIP and Diamyd Medical go up and down completely randomly.
Pair Corralation between FIRST SHIP and Diamyd Medical
Assuming the 90 days horizon FIRST SHIP LEASE is expected to generate 1.77 times more return on investment than Diamyd Medical. However, FIRST SHIP is 1.77 times more volatile than Diamyd Medical AB. It trades about 0.02 of its potential returns per unit of risk. Diamyd Medical AB is currently generating about 0.02 per unit of risk. If you would invest 2.94 in FIRST SHIP LEASE on November 4, 2024 and sell it today you would lose (0.56) from holding FIRST SHIP LEASE or give up 19.05% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
FIRST SHIP LEASE vs. Diamyd Medical AB
Performance |
| Timeline |
| FIRST SHIP LEASE |
| Diamyd Medical AB |
FIRST SHIP and Diamyd Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FIRST SHIP and Diamyd Medical
The main advantage of trading using opposite FIRST SHIP and Diamyd Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FIRST SHIP 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.| FIRST SHIP vs. BROADSTNET LEADL 00025 | FIRST SHIP vs. ADRIATIC METALS LS 013355 | FIRST SHIP vs. MAGNUM MINING EXP | FIRST SHIP vs. Yuexiu Transport Infrastructure |
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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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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