Correlation Between Diamyd Medical and Siemens Healthineers
Can any of the company-specific risk be diversified away by investing in both Diamyd Medical and Siemens Healthineers 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 Siemens Healthineers 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 Siemens Healthineers AG, you can compare the effects of market volatilities on Diamyd Medical and Siemens Healthineers 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 Siemens Healthineers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Diamyd Medical and Siemens Healthineers.
Diversification Opportunities for Diamyd Medical and Siemens Healthineers
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Diamyd and Siemens is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Diamyd Medical AB and Siemens Healthineers AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siemens Healthineers 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 Siemens Healthineers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Siemens Healthineers has no effect on the direction of Diamyd Medical i.e., Diamyd Medical and Siemens Healthineers go up and down completely randomly.
Pair Corralation between Diamyd Medical and Siemens Healthineers
Assuming the 90 days horizon Diamyd Medical AB is expected to generate 2.59 times more return on investment than Siemens Healthineers. However, Diamyd Medical is 2.59 times more volatile than Siemens Healthineers AG. It trades about 0.09 of its potential returns per unit of risk. Siemens Healthineers AG is currently generating about 0.07 per unit of risk. If you would invest 113.00 in Diamyd Medical AB on September 24, 2024 and sell it today you would earn a total of 23.00 from holding Diamyd Medical AB or generate 20.35% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Diamyd Medical AB vs. Siemens Healthineers AG
Performance |
Timeline |
Diamyd Medical AB |
Siemens Healthineers |
Diamyd Medical and Siemens Healthineers Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Diamyd Medical and Siemens Healthineers
The main advantage of trading using opposite Diamyd Medical and Siemens Healthineers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Diamyd Medical position performs unexpectedly, Siemens Healthineers 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 Siemens Healthineers will offset losses from the drop in Siemens Healthineers' long position.Diamyd Medical vs. Novo Nordisk AS | Diamyd Medical vs. CSL LTD SPONADR | Diamyd Medical vs. CSL Limited | Diamyd Medical vs. Mercedes Benz Group AG |
Siemens Healthineers vs. Abbott Laboratories | Siemens Healthineers vs. Medtronic PLC | Siemens Healthineers vs. Stryker | Siemens Healthineers vs. Boston Scientific |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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