Correlation Between Embellence Group and AAC Clyde
Can any of the company-specific risk be diversified away by investing in both Embellence Group and AAC Clyde 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 Embellence Group and AAC Clyde into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Embellence Group AB and AAC Clyde Space, you can compare the effects of market volatilities on Embellence Group and AAC Clyde 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 Embellence Group with a short position of AAC Clyde. Check out your portfolio center. Please also check ongoing floating volatility patterns of Embellence Group and AAC Clyde.
Diversification Opportunities for Embellence Group and AAC Clyde
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Embellence and AAC is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Embellence Group AB and AAC Clyde Space in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AAC Clyde Space and Embellence Group 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 Embellence Group AB are associated (or correlated) with AAC Clyde. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AAC Clyde Space has no effect on the direction of Embellence Group i.e., Embellence Group and AAC Clyde go up and down completely randomly.
Pair Corralation between Embellence Group and AAC Clyde
Assuming the 90 days trading horizon Embellence Group is expected to generate 18.41 times less return on investment than AAC Clyde. But when comparing it to its historical volatility, Embellence Group AB is 20.91 times less risky than AAC Clyde. It trades about 0.05 of its potential returns per unit of risk. AAC Clyde Space is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 145.00 in AAC Clyde Space on August 27, 2024 and sell it today you would earn a total of 4,460 from holding AAC Clyde Space or generate 3075.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Embellence Group AB vs. AAC Clyde Space
Performance |
| Timeline |
| Embellence Group |
| AAC Clyde Space |
Embellence Group and AAC Clyde Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Embellence Group and AAC Clyde
The main advantage of trading using opposite Embellence Group and AAC Clyde positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Embellence Group position performs unexpectedly, AAC Clyde 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 AAC Clyde will offset losses from the drop in AAC Clyde's long position.| Embellence Group vs. AB Electrolux | Embellence Group vs. Husqvarna AB | Embellence Group vs. Essity AB | Embellence Group vs. Dometic Group AB |
| AAC Clyde vs. GomSpace Group AB | AAC Clyde vs. Eolus Vind AB | AAC Clyde vs. Fingerprint Cards AB | AAC Clyde vs. SaltX Technology Holding |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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