Correlation Between SENECA FOODS-A and Diamyd Medical
Can any of the company-specific risk be diversified away by investing in both SENECA FOODS-A 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 SENECA FOODS-A and Diamyd Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SENECA FOODS A and Diamyd Medical AB, you can compare the effects of market volatilities on SENECA FOODS-A 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 SENECA FOODS-A with a short position of Diamyd Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of SENECA FOODS-A and Diamyd Medical.
Diversification Opportunities for SENECA FOODS-A and Diamyd Medical
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between SENECA and Diamyd is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding SENECA FOODS A 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 SENECA FOODS-A 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 SENECA FOODS A 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 SENECA FOODS-A i.e., SENECA FOODS-A and Diamyd Medical go up and down completely randomly.
Pair Corralation between SENECA FOODS-A and Diamyd Medical
Assuming the 90 days trading horizon SENECA FOODS A is expected to generate 0.45 times more return on investment than Diamyd Medical. However, SENECA FOODS A is 2.22 times less risky than Diamyd Medical. It trades about 0.09 of its potential returns per unit of risk. Diamyd Medical AB is currently generating about 0.02 per unit of risk. If you would invest 4,680 in SENECA FOODS A on September 1, 2024 and sell it today you would earn a total of 1,770 from holding SENECA FOODS A or generate 37.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SENECA FOODS A vs. Diamyd Medical AB
Performance |
| Timeline |
| SENECA FOODS A |
| Diamyd Medical AB |
SENECA FOODS-A and Diamyd Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SENECA FOODS-A and Diamyd Medical
The main advantage of trading using opposite SENECA FOODS-A and Diamyd Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SENECA FOODS-A 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.| SENECA FOODS-A vs. SIVERS SEMICONDUCTORS AB | SENECA FOODS-A vs. Darden Restaurants | SENECA FOODS-A vs. Reliance Steel Aluminum | SENECA FOODS-A 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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