Correlation Between DiaMedica Therapeutics and Vericel Corp

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both DiaMedica Therapeutics and Vericel Corp 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 Vericel Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DiaMedica Therapeutics and Vericel Corp Ord, you can compare the effects of market volatilities on DiaMedica Therapeutics and Vericel Corp 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 Vericel Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of DiaMedica Therapeutics and Vericel Corp.

Diversification Opportunities for DiaMedica Therapeutics and Vericel Corp

-0.25
  Correlation Coefficient

Very good diversification

The 3 months correlation between DiaMedica and Vericel is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding DiaMedica Therapeutics and Vericel Corp Ord in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vericel Corp Ord 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 Vericel Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vericel Corp Ord has no effect on the direction of DiaMedica Therapeutics i.e., DiaMedica Therapeutics and Vericel Corp go up and down completely randomly.

Pair Corralation between DiaMedica Therapeutics and Vericel Corp

Given the investment horizon of 90 days DiaMedica Therapeutics is expected to generate 2.47 times more return on investment than Vericel Corp. However, DiaMedica Therapeutics is 2.47 times more volatile than Vericel Corp Ord. It trades about 0.07 of its potential returns per unit of risk. Vericel Corp Ord is currently generating about -0.11 per unit of risk. If you would invest  549.00  in DiaMedica Therapeutics on December 3, 2024 and sell it today you would earn a total of  99.50  from holding DiaMedica Therapeutics or generate 18.12% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

DiaMedica Therapeutics  vs.  Vericel Corp Ord

 Performance 
       Timeline  
DiaMedica Therapeutics 

Risk-Adjusted Performance

Modest

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in DiaMedica Therapeutics are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain basic indicators, DiaMedica Therapeutics exhibited solid returns over the last few months and may actually be approaching a breakup point.
Vericel Corp Ord 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Vericel Corp Ord has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's technical and fundamental indicators remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

DiaMedica Therapeutics and Vericel Corp Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with DiaMedica Therapeutics and Vericel Corp

The main advantage of trading using opposite DiaMedica Therapeutics and Vericel Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DiaMedica Therapeutics position performs unexpectedly, Vericel Corp 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 Vericel Corp will offset losses from the drop in Vericel Corp's long position.
The idea behind DiaMedica Therapeutics and Vericel Corp Ord 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.
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.

Other Complementary Tools

Bollinger Bands
Use Bollinger Bands indicator to analyze target price for a given investing horizon
Positions Ratings
Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance
Competition Analyzer
Analyze and compare many basic indicators for a group of related or unrelated entities
Portfolio Manager
State of the art Portfolio Manager to monitor and improve performance of your invested capital
Bond Analysis
Evaluate and analyze corporate bonds as a potential investment for your portfolios.