Correlation Between Embellence Group and Goodbye Kansas
Can any of the company-specific risk be diversified away by investing in both Embellence Group and Goodbye Kansas 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 Goodbye Kansas 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 Goodbye Kansas Group, you can compare the effects of market volatilities on Embellence Group and Goodbye Kansas 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 Goodbye Kansas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Embellence Group and Goodbye Kansas.
Diversification Opportunities for Embellence Group and Goodbye Kansas
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Embellence and Goodbye is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Embellence Group AB and Goodbye Kansas Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goodbye Kansas Group 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 Goodbye Kansas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Goodbye Kansas Group has no effect on the direction of Embellence Group i.e., Embellence Group and Goodbye Kansas go up and down completely randomly.
Pair Corralation between Embellence Group and Goodbye Kansas
Assuming the 90 days trading horizon Embellence Group is expected to generate 34.66 times less return on investment than Goodbye Kansas. But when comparing it to its historical volatility, Embellence Group AB is 2.27 times less risky than Goodbye Kansas. It trades about 0.01 of its potential returns per unit of risk. Goodbye Kansas Group is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 134.00 in Goodbye Kansas Group on September 24, 2024 and sell it today you would earn a total of 13.00 from holding Goodbye Kansas Group or generate 9.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Embellence Group AB vs. Goodbye Kansas Group
Performance |
| Timeline |
| Embellence Group |
| Goodbye Kansas Group |
Embellence Group and Goodbye Kansas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Embellence Group and Goodbye Kansas
The main advantage of trading using opposite Embellence Group and Goodbye Kansas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Embellence Group position performs unexpectedly, Goodbye Kansas 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 Goodbye Kansas will offset losses from the drop in Goodbye Kansas' long position.| Embellence Group vs. Rugvista Group AB | Embellence Group vs. Nimbus Group AB | Embellence Group vs. Desenio Group AB | Embellence Group vs. Idun Industrier AB |
| Goodbye Kansas vs. Modern Times Group | Goodbye Kansas vs. Millicom International Cellular | Goodbye Kansas vs. Tele2 AB | Goodbye Kansas vs. BHG Group 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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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