Correlation Between Addtech AB and EMBARK EDUCATION
Can any of the company-specific risk be diversified away by investing in both Addtech AB and EMBARK EDUCATION 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 Addtech AB and EMBARK EDUCATION into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Addtech AB and EMBARK EDUCATION LTD, you can compare the effects of market volatilities on Addtech AB and EMBARK EDUCATION 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 Addtech AB with a short position of EMBARK EDUCATION. Check out your portfolio center. Please also check ongoing floating volatility patterns of Addtech AB and EMBARK EDUCATION.
Diversification Opportunities for Addtech AB and EMBARK EDUCATION
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Addtech and EMBARK is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Addtech AB and EMBARK EDUCATION LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EMBARK EDUCATION LTD and Addtech AB 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 Addtech AB are associated (or correlated) with EMBARK EDUCATION. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EMBARK EDUCATION LTD has no effect on the direction of Addtech AB i.e., Addtech AB and EMBARK EDUCATION go up and down completely randomly.
Pair Corralation between Addtech AB and EMBARK EDUCATION
Assuming the 90 days trading horizon Addtech AB is expected to generate 1.69 times more return on investment than EMBARK EDUCATION. However, Addtech AB is 1.69 times more volatile than EMBARK EDUCATION LTD. It trades about 0.08 of its potential returns per unit of risk. EMBARK EDUCATION LTD is currently generating about 0.05 per unit of risk. If you would invest 1,136 in Addtech AB on October 15, 2024 and sell it today you would earn a total of 1,390 from holding Addtech AB or generate 122.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Addtech AB vs. EMBARK EDUCATION LTD
Performance |
| Timeline |
| Addtech AB |
| EMBARK EDUCATION LTD |
Addtech AB and EMBARK EDUCATION Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Addtech AB and EMBARK EDUCATION
The main advantage of trading using opposite Addtech AB and EMBARK EDUCATION positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Addtech AB position performs unexpectedly, EMBARK EDUCATION 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 EMBARK EDUCATION will offset losses from the drop in EMBARK EDUCATION's long position.| Addtech AB vs. Sinopec Shanghai Petrochemical | Addtech AB vs. InterContinental Hotels Group | Addtech AB vs. SILICON LABORATOR | Addtech AB vs. Pebblebrook Hotel Trust |
| EMBARK EDUCATION vs. CLOVER HEALTH INV | EMBARK EDUCATION vs. PLAYWAY SA ZY 10 | EMBARK EDUCATION vs. YOOMA WELLNESS INC | EMBARK EDUCATION vs. Molina Healthcare |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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