Correlation Between DATATEC and Diamyd Medical

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

By analyzing existing cross correlation between DATATEC LTD 2 and Diamyd Medical AB, you can compare the effects of market volatilities on DATATEC and Diamyd Medical 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 DATATEC with a short position of Diamyd Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of DATATEC and Diamyd Medical.

Diversification Opportunities for DATATEC and Diamyd Medical

0.84

Correlation Coefficient

DATATEC  Diamyd Medical

Very poor diversification

The 3 months correlation between DATATEC and Diamyd is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding DATATEC LTD 2 and Diamyd Medical AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Diamyd Medical AB and DATATEC 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 DATATEC LTD 2 are associated (or correlated) with Diamyd Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Diamyd Medical AB has no effect on the direction of DATATEC i.e., DATATEC and Diamyd Medical go up and down completely randomly.

Pair Corralation between DATATEC and Diamyd Medical

Assuming the 90 days trading horizon DATATEC LTD 2 is expected to generate 0.46 times more return on investment than Diamyd Medical. However, DATATEC LTD 2 is 2.16 times less risky than Diamyd Medical. It trades about -0.02 of its potential returns per unit of risk. Diamyd Medical AB is currently generating about -0.04 per unit of risk. If you would invest  600.00  in DATATEC LTD 2 on April 15, 2025 and sell it today you would lose (5.00) from holding DATATEC LTD 2 or give up 0.83% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

DATATEC LTD 2  vs.  Diamyd Medical AB

DATATEC LTD 2

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in DATATEC LTD 2 are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, DATATEC reported solid returns over the last few months and may actually be approaching a breakup point.

Diamyd Medical AB

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Diamyd Medical AB are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Diamyd Medical reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with DATATEC and Diamyd Medical

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

The idea behind DATATEC LTD 2 and Diamyd Medical AB 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.