Correlation Between URBAN OUTFITTERS and Diamyd Medical
Can any of the company-specific risk be diversified away by investing in both URBAN OUTFITTERS 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 URBAN OUTFITTERS and Diamyd Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between URBAN OUTFITTERS and Diamyd Medical AB, you can compare the effects of market volatilities on URBAN OUTFITTERS 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 URBAN OUTFITTERS with a short position of Diamyd Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of URBAN OUTFITTERS and Diamyd Medical.
Diversification Opportunities for URBAN OUTFITTERS and Diamyd Medical
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between URBAN and Diamyd is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding URBAN OUTFITTERS 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 URBAN OUTFITTERS 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 URBAN OUTFITTERS 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 URBAN OUTFITTERS i.e., URBAN OUTFITTERS and Diamyd Medical go up and down completely randomly.
Pair Corralation between URBAN OUTFITTERS and Diamyd Medical
Assuming the 90 days trading horizon URBAN OUTFITTERS is expected to generate 0.97 times more return on investment than Diamyd Medical. However, URBAN OUTFITTERS is 1.03 times less risky than Diamyd Medical. It trades about 0.34 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 3,300 in URBAN OUTFITTERS on September 2, 2024 and sell it today you would earn a total of 1,180 from holding URBAN OUTFITTERS or generate 35.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
URBAN OUTFITTERS vs. Diamyd Medical AB
Performance |
| Timeline |
| URBAN OUTFITTERS |
| Diamyd Medical AB |
URBAN OUTFITTERS and Diamyd Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with URBAN OUTFITTERS and Diamyd Medical
The main advantage of trading using opposite URBAN OUTFITTERS and Diamyd Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if URBAN OUTFITTERS 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.| URBAN OUTFITTERS vs. SIVERS SEMICONDUCTORS AB | URBAN OUTFITTERS vs. Darden Restaurants | URBAN OUTFITTERS vs. Reliance Steel Aluminum | URBAN OUTFITTERS vs. Q2M Managementberatung AG |
| 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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