Correlation Between Mercedes-Benz Group and Diamyd Medical
Can any of the company-specific risk be diversified away by investing in both Mercedes-Benz Group 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 Mercedes-Benz Group and Diamyd Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mercedes Benz Group AG and Diamyd Medical AB, you can compare the effects of market volatilities on Mercedes-Benz Group 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 Mercedes-Benz Group with a short position of Diamyd Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mercedes-Benz Group and Diamyd Medical.
Diversification Opportunities for Mercedes-Benz Group and Diamyd Medical
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Mercedes-Benz and Diamyd is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Mercedes Benz Group AG 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 Mercedes-Benz Group 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 Mercedes Benz Group AG 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 Mercedes-Benz Group i.e., Mercedes-Benz Group and Diamyd Medical go up and down completely randomly.
Pair Corralation between Mercedes-Benz Group and Diamyd Medical
Assuming the 90 days horizon Mercedes Benz Group AG is expected to generate 0.8 times more return on investment than Diamyd Medical. However, Mercedes Benz Group AG is 1.25 times less risky than Diamyd Medical. It trades about 0.08 of its potential returns per unit of risk. Diamyd Medical AB is currently generating about -0.21 per unit of risk. If you would invest 5,810 in Mercedes Benz Group AG on November 27, 2024 and sell it today you would earn a total of 140.00 from holding Mercedes Benz Group AG or generate 2.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mercedes Benz Group AG vs. Diamyd Medical AB
Performance |
| Timeline |
| Mercedes Benz Group |
| Diamyd Medical AB |
Mercedes-Benz Group and Diamyd Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mercedes-Benz Group and Diamyd Medical
The main advantage of trading using opposite Mercedes-Benz Group and Diamyd Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mercedes-Benz Group 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.| Mercedes-Benz Group vs. Addus HomeCare | Mercedes-Benz Group vs. FONIX MOBILE PLC | Mercedes-Benz Group vs. Warner Music Group | Mercedes-Benz Group vs. UNIVERSAL MUSIC GROUP |
| Diamyd Medical vs. Novo Nordisk AS | Diamyd Medical vs. CSL LTD SPONADR | Diamyd Medical vs. CSL Limited | Diamyd Medical vs. Mercedes Benz Group AG |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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