Correlation Between Diamyd Medical and THARISA NON

Can any of the company-specific risk be diversified away by investing in both Diamyd Medical and THARISA NON 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 Diamyd Medical and THARISA NON into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Diamyd Medical AB and THARISA NON LIST, you can compare the effects of market volatilities on Diamyd Medical and THARISA NON 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 Diamyd Medical with a short position of THARISA NON. Check out your portfolio center. Please also check ongoing floating volatility patterns of Diamyd Medical and THARISA NON.

Diversification Opportunities for Diamyd Medical and THARISA NON

0.21

Correlation Coefficient

Diamyd Medical  THARISA NON

Modest diversification

The 3 months correlation between Diamyd and THARISA is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Diamyd Medical AB and THARISA NON LIST in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on THARISA NON LIST and Diamyd Medical 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 Diamyd Medical AB are associated (or correlated) with THARISA NON. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of THARISA NON LIST has no effect on the direction of Diamyd Medical i.e., Diamyd Medical and THARISA NON go up and down completely randomly.

Pair Corralation between Diamyd Medical and THARISA NON

Assuming the 90 days horizon Diamyd Medical AB is expected to under-perform the THARISA NON. In addition to that, Diamyd Medical is 2.02 times more volatile than THARISA NON LIST. It trades about -0.15 of its total potential returns per unit of risk. THARISA NON LIST is currently generating about -0.02 per unit of volatility. If you would invest  75.00  in THARISA NON LIST on December 20, 2024 and sell it today you would lose (4.00) from holding THARISA NON LIST or give up 5.33% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.31%
Values	Daily Returns

Diamyd Medical AB  vs.  THARISA NON LIST

Diamyd Medical AB

Risk-Adjusted Performance

Very Weak

Over the last 90 days Diamyd Medical AB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

THARISA NON LIST

Risk-Adjusted Performance

Very Weak

Over the last 90 days THARISA NON LIST has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, THARISA NON is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Diamyd Medical and THARISA NON

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

The idea behind Diamyd Medical AB and THARISA NON LIST 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.