Correlation Between OMX Stockholm and Diagonal Bio
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By analyzing existing cross correlation between OMX Stockholm Mid and Diagonal Bio AB, you can compare the effects of market volatilities on OMX Stockholm and Diagonal Bio 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 OMX Stockholm with a short position of Diagonal Bio. Check out your portfolio center. Please also check ongoing floating volatility patterns of OMX Stockholm and Diagonal Bio.
Diversification Opportunities for OMX Stockholm and Diagonal Bio
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between OMX and Diagonal is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding OMX Stockholm Mid and Diagonal Bio AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Diagonal Bio AB and OMX Stockholm 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 OMX Stockholm Mid are associated (or correlated) with Diagonal Bio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Diagonal Bio AB has no effect on the direction of OMX Stockholm i.e., OMX Stockholm and Diagonal Bio go up and down completely randomly.
Pair Corralation between OMX Stockholm and Diagonal Bio
Assuming the 90 days trading horizon OMX Stockholm is expected to generate 2.23 times less return on investment than Diagonal Bio. But when comparing it to its historical volatility, OMX Stockholm Mid is 15.29 times less risky than Diagonal Bio. It trades about 0.05 of its potential returns per unit of risk. Diagonal Bio AB is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 85.00 in Diagonal Bio AB on August 30, 2024 and sell it today you would lose (81.95) from holding Diagonal Bio AB or give up 96.41% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
OMX Stockholm Mid vs. Diagonal Bio AB
Performance |
| Timeline |
OMX Stockholm and Diagonal Bio Volatility Contrast
Predicted Return Density |
| Returns |
OMX Stockholm Mid
Pair trading matchups for OMX Stockholm
Diagonal Bio AB
Pair trading matchups for Diagonal Bio
Pair Trading with OMX Stockholm and Diagonal Bio
The main advantage of trading using opposite OMX Stockholm and Diagonal Bio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OMX Stockholm position performs unexpectedly, Diagonal Bio 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 Diagonal Bio will offset losses from the drop in Diagonal Bio's long position.| OMX Stockholm vs. Svenska Handelsbanken AB | OMX Stockholm vs. FormPipe Software AB | OMX Stockholm vs. Skandinaviska Enskilda Banken | OMX Stockholm vs. Online Brands Nordic |
| Diagonal Bio vs. AstraZeneca PLC | Diagonal Bio vs. Investor AB ser | Diagonal Bio vs. Investor AB ser | Diagonal Bio vs. Atlas Copco 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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