Correlation Between DiaMedica Therapeutics and Longeveron LLC

Can any of the company-specific risk be diversified away by investing in both DiaMedica Therapeutics and Longeveron LLC 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 DiaMedica Therapeutics and Longeveron LLC into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between DiaMedica Therapeutics and Longeveron LLC, you can compare the effects of market volatilities on DiaMedica Therapeutics and Longeveron LLC 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 DiaMedica Therapeutics with a short position of Longeveron LLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of DiaMedica Therapeutics and Longeveron LLC.

Diversification Opportunities for DiaMedica Therapeutics and Longeveron LLC

-0.42

Correlation Coefficient

DiaMedica Therapeutics  Longeveron LLC

Very good diversification

The 3 months correlation between DiaMedica and Longeveron is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding DiaMedica Therapeutics and Longeveron LLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Longeveron LLC and DiaMedica Therapeutics 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 DiaMedica Therapeutics are associated (or correlated) with Longeveron LLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Longeveron LLC has no effect on the direction of DiaMedica Therapeutics i.e., DiaMedica Therapeutics and Longeveron LLC go up and down completely randomly.

Pair Corralation between DiaMedica Therapeutics and Longeveron LLC

Given the investment horizon of 90 days DiaMedica Therapeutics is expected to under-perform the Longeveron LLC. But the stock apears to be less risky and, when comparing its historical volatility, DiaMedica Therapeutics is 1.04 times less risky than Longeveron LLC. The stock trades about -0.12 of its potential returns per unit of risk. The Longeveron LLC is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest  177.00  in Longeveron LLC on December 30, 2024 and sell it today you would lose (19.00) from holding Longeveron LLC or give up 10.73% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

DiaMedica Therapeutics  vs.  Longeveron LLC

DiaMedica Therapeutics

Risk-Adjusted Performance

Very Weak

Over the last 90 days DiaMedica Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Longeveron LLC

Risk-Adjusted Performance

Very Weak

Over the last 90 days Longeveron LLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with DiaMedica Therapeutics and Longeveron LLC

The main advantage of trading using opposite DiaMedica Therapeutics and Longeveron LLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DiaMedica Therapeutics position performs unexpectedly, Longeveron LLC 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 Longeveron LLC will offset losses from the drop in Longeveron LLC's long position.

The idea behind DiaMedica Therapeutics and Longeveron LLC pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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.