Correlation Between Embellence Group and VIMAB Group
Can any of the company-specific risk be diversified away by investing in both Embellence Group and VIMAB 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 Embellence Group and VIMAB Group 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 VIMAB Group AB, you can compare the effects of market volatilities on Embellence Group and VIMAB 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 Embellence Group with a short position of VIMAB Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Embellence Group and VIMAB Group.
Diversification Opportunities for Embellence Group and VIMAB Group
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Embellence and VIMAB is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Embellence Group AB and VIMAB Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VIMAB Group 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 VIMAB Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VIMAB Group AB has no effect on the direction of Embellence Group i.e., Embellence Group and VIMAB Group go up and down completely randomly.
Pair Corralation between Embellence Group and VIMAB Group
Assuming the 90 days trading horizon Embellence Group AB is expected to generate 0.27 times more return on investment than VIMAB Group. However, Embellence Group AB is 3.76 times less risky than VIMAB Group. It trades about -0.19 of its potential returns per unit of risk. VIMAB Group AB is currently generating about -0.37 per unit of risk. If you would invest 3,160 in Embellence Group AB on August 30, 2024 and sell it today you would lose (210.00) from holding Embellence Group AB or give up 6.65% 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. VIMAB Group AB
Performance |
| Timeline |
| Embellence Group |
| VIMAB Group AB |
Embellence Group and VIMAB Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Embellence Group and VIMAB Group
The main advantage of trading using opposite Embellence Group and VIMAB Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Embellence Group position performs unexpectedly, VIMAB 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 VIMAB Group will offset losses from the drop in VIMAB Group's long position.| Embellence Group vs. AB Electrolux | Embellence Group vs. Husqvarna AB | Embellence Group vs. Essity AB | Embellence Group vs. Dometic Group AB |
| VIMAB Group vs. Vitec Software Group | VIMAB Group vs. Invisio Communications AB | VIMAB Group vs. Qleanair Holding AB | VIMAB Group vs. Upsales Technology 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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