Correlation Between ETFS Coffee and Diamyd Medical
Can any of the company-specific risk be diversified away by investing in both ETFS Coffee 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 ETFS Coffee and Diamyd Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ETFS Coffee ETC and Diamyd Medical AB, you can compare the effects of market volatilities on ETFS Coffee 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 ETFS Coffee with a short position of Diamyd Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of ETFS Coffee and Diamyd Medical.
Diversification Opportunities for ETFS Coffee and Diamyd Medical
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between ETFS and Diamyd is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding ETFS Coffee ETC 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 ETFS Coffee 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 ETFS Coffee ETC 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 ETFS Coffee i.e., ETFS Coffee and Diamyd Medical go up and down completely randomly.
Pair Corralation between ETFS Coffee and Diamyd Medical
Assuming the 90 days trading horizon ETFS Coffee ETC is expected to generate 0.53 times more return on investment than Diamyd Medical. However, ETFS Coffee ETC is 1.9 times less risky than Diamyd Medical. It trades about 0.67 of its potential returns per unit of risk. Diamyd Medical AB is currently generating about 0.05 per unit of risk. If you would invest 3,796 in ETFS Coffee ETC on September 2, 2024 and sell it today you would earn a total of 1,463 from holding ETFS Coffee ETC or generate 38.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
ETFS Coffee ETC vs. Diamyd Medical AB
Performance |
| Timeline |
| ETFS Coffee ETC |
| Diamyd Medical AB |
ETFS Coffee and Diamyd Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ETFS Coffee and Diamyd Medical
The main advantage of trading using opposite ETFS Coffee and Diamyd Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ETFS Coffee 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.| ETFS Coffee vs. Apple Inc | ETFS Coffee vs. Apple Inc | ETFS Coffee vs. Apple Inc | ETFS Coffee vs. Apple Inc |
| Diamyd Medical vs. Superior Plus Corp | Diamyd Medical vs. NMI Holdings | Diamyd Medical vs. Origin Agritech | Diamyd Medical vs. SIVERS SEMICONDUCTORS AB |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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