Correlation Between SPORTING and Diamyd Medical
Can any of the company-specific risk be diversified away by investing in both SPORTING 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 SPORTING and Diamyd Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPORTING and Diamyd Medical AB, you can compare the effects of market volatilities on SPORTING 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 SPORTING with a short position of Diamyd Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPORTING and Diamyd Medical.
Diversification Opportunities for SPORTING and Diamyd Medical
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between SPORTING and Diamyd is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding SPORTING 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 SPORTING 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 SPORTING 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 SPORTING i.e., SPORTING and Diamyd Medical go up and down completely randomly.
Pair Corralation between SPORTING and Diamyd Medical
Assuming the 90 days trading horizon SPORTING is expected to generate 2.57 times less return on investment than Diamyd Medical. But when comparing it to its historical volatility, SPORTING is 1.66 times less risky than Diamyd Medical. It trades about 0.02 of its potential returns per unit of risk. Diamyd Medical AB is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 97.00 in Diamyd Medical AB on September 1, 2024 and sell it today you would earn a total of 10.00 from holding Diamyd Medical AB or generate 10.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPORTING vs. Diamyd Medical AB
Performance |
| Timeline |
| SPORTING |
| Diamyd Medical AB |
SPORTING and Diamyd Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPORTING and Diamyd Medical
The main advantage of trading using opposite SPORTING and Diamyd Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPORTING 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.| SPORTING vs. SIVERS SEMICONDUCTORS AB | SPORTING vs. Darden Restaurants | SPORTING vs. Reliance Steel Aluminum | SPORTING vs. Q2M Managementberatung AG |
| Diamyd Medical vs. DXC Technology Co | Diamyd Medical vs. Digilife Technologies Limited | Diamyd Medical vs. Amkor Technology | Diamyd Medical vs. GEAR4MUSIC LS 10 |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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