Correlation Between Talanx AG and Diamyd Medical
Can any of the company-specific risk be diversified away by investing in both Talanx AG 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 Talanx AG and Diamyd Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Talanx AG and Diamyd Medical AB, you can compare the effects of market volatilities on Talanx AG 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 Talanx AG with a short position of Diamyd Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Talanx AG and Diamyd Medical.
Diversification Opportunities for Talanx AG and Diamyd Medical
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Talanx and Diamyd is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Talanx 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 Talanx AG 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 Talanx 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 Talanx AG i.e., Talanx AG and Diamyd Medical go up and down completely randomly.
Pair Corralation between Talanx AG and Diamyd Medical
Assuming the 90 days horizon Talanx AG is expected to generate 1.25 times less return on investment than Diamyd Medical. But when comparing it to its historical volatility, Talanx AG is 3.86 times less risky than Diamyd Medical. It trades about 0.1 of its potential returns per unit of risk. Diamyd Medical AB is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 135.00 in Diamyd Medical AB on October 11, 2024 and sell it today you would earn a total of 27.00 from holding Diamyd Medical AB or generate 20.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Talanx AG vs. Diamyd Medical AB
Performance |
| Timeline |
| Talanx AG |
| Diamyd Medical AB |
Talanx AG and Diamyd Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Talanx AG and Diamyd Medical
The main advantage of trading using opposite Talanx AG and Diamyd Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Talanx AG 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.| Talanx AG vs. Shenandoah Telecommunications | Talanx AG vs. International Game Technology | Talanx AG vs. GMO Internet | Talanx AG vs. BRAGG GAMING GRP |
| Diamyd Medical vs. Siemens Healthineers AG | Diamyd Medical vs. Garofalo Health Care | Diamyd Medical vs. Perdoceo Education | Diamyd Medical vs. American Public Education |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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