Correlation Between Diamyd Medical and AOYAMA TRADING
Can any of the company-specific risk be diversified away by investing in both Diamyd Medical and AOYAMA TRADING 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 AOYAMA TRADING 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 AOYAMA TRADING, you can compare the effects of market volatilities on Diamyd Medical and AOYAMA TRADING 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 AOYAMA TRADING. Check out your portfolio center. Please also check ongoing floating volatility patterns of Diamyd Medical and AOYAMA TRADING.
Diversification Opportunities for Diamyd Medical and AOYAMA TRADING
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Diamyd and AOYAMA is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Diamyd Medical AB and AOYAMA TRADING in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AOYAMA TRADING 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 AOYAMA TRADING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AOYAMA TRADING has no effect on the direction of Diamyd Medical i.e., Diamyd Medical and AOYAMA TRADING go up and down completely randomly.
Pair Corralation between Diamyd Medical and AOYAMA TRADING
Assuming the 90 days horizon Diamyd Medical is expected to generate 8.9 times less return on investment than AOYAMA TRADING. In addition to that, Diamyd Medical is 1.03 times more volatile than AOYAMA TRADING. It trades about 0.01 of its total potential returns per unit of risk. AOYAMA TRADING is currently generating about 0.11 per unit of volatility. If you would invest 855.00 in AOYAMA TRADING on December 1, 2024 and sell it today you would earn a total of 465.00 from holding AOYAMA TRADING or generate 54.39% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Diamyd Medical AB vs. AOYAMA TRADING
Performance |
Timeline |
Diamyd Medical AB |
AOYAMA TRADING |
Diamyd Medical and AOYAMA TRADING Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Diamyd Medical and AOYAMA TRADING
The main advantage of trading using opposite Diamyd Medical and AOYAMA TRADING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Diamyd Medical position performs unexpectedly, AOYAMA TRADING 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 AOYAMA TRADING will offset losses from the drop in AOYAMA TRADING's long position.Diamyd Medical vs. Rayonier Advanced Materials | Diamyd Medical vs. NEWELL RUBBERMAID | Diamyd Medical vs. Broadcom | Diamyd Medical vs. Transport International Holdings |
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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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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