Correlation Between Embellence Group and AXichem AB
Can any of the company-specific risk be diversified away by investing in both Embellence Group and AXichem AB 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 AXichem AB 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 aXichem AB, you can compare the effects of market volatilities on Embellence Group and AXichem AB 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 AXichem AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Embellence Group and AXichem AB.
Diversification Opportunities for Embellence Group and AXichem AB
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Embellence and AXichem is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Embellence Group AB and aXichem AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on aXichem AB 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 AXichem AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of aXichem AB has no effect on the direction of Embellence Group i.e., Embellence Group and AXichem AB go up and down completely randomly.
Pair Corralation between Embellence Group and AXichem AB
Assuming the 90 days trading horizon Embellence Group AB is expected to under-perform the AXichem AB. But the stock apears to be less risky and, when comparing its historical volatility, Embellence Group AB is 5.32 times less risky than AXichem AB. The stock trades about -0.1 of its potential returns per unit of risk. The aXichem AB is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 153.00 in aXichem AB on September 5, 2024 and sell it today you would lose (6.00) from holding aXichem AB or give up 3.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Embellence Group AB vs. aXichem AB
Performance |
| Timeline |
| Embellence Group |
| aXichem AB |
Embellence Group and AXichem AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Embellence Group and AXichem AB
The main advantage of trading using opposite Embellence Group and AXichem AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Embellence Group position performs unexpectedly, AXichem AB 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 AXichem AB will offset losses from the drop in AXichem AB's long position.| Embellence Group vs. AB Electrolux | Embellence Group vs. Husqvarna AB | Embellence Group vs. Essity AB | Embellence Group vs. Dometic Group AB |
| AXichem AB vs. Bactiguard Holding AB | AXichem AB vs. Cantargia AB | AXichem AB vs. BIMobject AB | AXichem AB vs. Alzinova 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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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