Correlation Between ULTRA CLEAN and Diamyd Medical
Can any of the company-specific risk be diversified away by investing in both ULTRA CLEAN 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 ULTRA CLEAN and Diamyd Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ULTRA CLEAN HLDGS and Diamyd Medical AB, you can compare the effects of market volatilities on ULTRA CLEAN 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 ULTRA CLEAN with a short position of Diamyd Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of ULTRA CLEAN and Diamyd Medical.
Diversification Opportunities for ULTRA CLEAN and Diamyd Medical
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ULTRA and Diamyd is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding ULTRA CLEAN HLDGS 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 ULTRA CLEAN 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 ULTRA CLEAN HLDGS 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 ULTRA CLEAN i.e., ULTRA CLEAN and Diamyd Medical go up and down completely randomly.
Pair Corralation between ULTRA CLEAN and Diamyd Medical
Assuming the 90 days trading horizon ULTRA CLEAN is expected to generate 2.33 times less return on investment than Diamyd Medical. But when comparing it to its historical volatility, ULTRA CLEAN HLDGS is 1.93 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 0.02 of returns per unit of risk over similar time horizon. If you would invest 137.00 in Diamyd Medical AB on September 3, 2024 and sell it today you would lose (25.00) from holding Diamyd Medical AB or give up 18.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ULTRA CLEAN HLDGS vs. Diamyd Medical AB
Performance |
| Timeline |
| ULTRA CLEAN HLDGS |
| Diamyd Medical AB |
ULTRA CLEAN and Diamyd Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ULTRA CLEAN and Diamyd Medical
The main advantage of trading using opposite ULTRA CLEAN and Diamyd Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ULTRA CLEAN 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.| ULTRA CLEAN vs. TOTAL GABON | ULTRA CLEAN vs. Walgreens Boots Alliance | ULTRA CLEAN vs. Banco Santander SA | ULTRA CLEAN vs. Peak Resources Limited |
| Diamyd Medical vs. WIMFARM SA EO | Diamyd Medical vs. Tencent Music Entertainment | Diamyd Medical vs. ULTRA CLEAN HLDGS | Diamyd Medical vs. AGRICULTBK HADR25 YC |
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 Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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