Correlation Between Enad Global and Embellence Group
Can any of the company-specific risk be diversified away by investing in both Enad Global and Embellence Group 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 Enad Global and Embellence Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Enad Global 7 and Embellence Group AB, you can compare the effects of market volatilities on Enad Global and Embellence Group 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 Enad Global with a short position of Embellence Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enad Global and Embellence Group.
Diversification Opportunities for Enad Global and Embellence Group
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Enad and Embellence is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Enad Global 7 and Embellence Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Embellence Group and Enad Global 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 Enad Global 7 are associated (or correlated) with Embellence Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Embellence Group has no effect on the direction of Enad Global i.e., Enad Global and Embellence Group go up and down completely randomly.
Pair Corralation between Enad Global and Embellence Group
Assuming the 90 days trading horizon Enad Global 7 is expected to under-perform the Embellence Group. In addition to that, Enad Global is 1.55 times more volatile than Embellence Group AB. It trades about -0.02 of its total potential returns per unit of risk. Embellence Group AB is currently generating about 0.05 per unit of volatility. If you would invest 1,939 in Embellence Group AB on September 24, 2024 and sell it today you would earn a total of 1,121 from holding Embellence Group AB or generate 57.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Enad Global 7 vs. Embellence Group AB
Performance |
| Timeline |
| Enad Global 7 |
| Embellence Group |
Enad Global and Embellence Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enad Global and Embellence Group
The main advantage of trading using opposite Enad Global and Embellence Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enad Global position performs unexpectedly, Embellence Group 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 Embellence Group will offset losses from the drop in Embellence Group's long position.| Enad Global vs. Samhllsbyggnadsbolaget i Norden | Enad Global vs. Sinch AB | Enad Global vs. Zaptec AS | Enad Global vs. Evolution AB |
| Embellence Group vs. Rugvista Group AB | Embellence Group vs. Nimbus Group AB | Embellence Group vs. Desenio Group AB | Embellence Group vs. Idun Industrier AB |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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