Correlation Between Embla Medical and BankIn Bredygt
Can any of the company-specific risk be diversified away by investing in both Embla Medical and BankIn Bredygt 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 Embla Medical and BankIn Bredygt into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Embla Medical hf and BankIn Bredygt Klimaakt, you can compare the effects of market volatilities on Embla Medical and BankIn Bredygt 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 Embla Medical with a short position of BankIn Bredygt. Check out your portfolio center. Please also check ongoing floating volatility patterns of Embla Medical and BankIn Bredygt.
Diversification Opportunities for Embla Medical and BankIn Bredygt
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Embla and BankIn is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Embla Medical hf and BankIn Bredygt Klimaakt in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BankIn Bredygt Klimaakt and Embla Medical 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 Embla Medical hf are associated (or correlated) with BankIn Bredygt. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BankIn Bredygt Klimaakt has no effect on the direction of Embla Medical i.e., Embla Medical and BankIn Bredygt go up and down completely randomly.
Pair Corralation between Embla Medical and BankIn Bredygt
Assuming the 90 days trading horizon Embla Medical hf is expected to generate 1.66 times more return on investment than BankIn Bredygt. However, Embla Medical is 1.66 times more volatile than BankIn Bredygt Klimaakt. It trades about -0.04 of its potential returns per unit of risk. BankIn Bredygt Klimaakt is currently generating about -0.14 per unit of risk. If you would invest 3,630 in Embla Medical hf on October 22, 2024 and sell it today you would lose (110.00) from holding Embla Medical hf or give up 3.03% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 60.53% |
| Values | Daily Returns |
Embla Medical hf vs. BankIn Bredygt Klimaakt
Performance |
| Timeline |
| Embla Medical hf |
| BankIn Bredygt Klimaakt |
Embla Medical and BankIn Bredygt Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Embla Medical and BankIn Bredygt
The main advantage of trading using opposite Embla Medical and BankIn Bredygt positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Embla Medical position performs unexpectedly, BankIn Bredygt 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 BankIn Bredygt will offset losses from the drop in BankIn Bredygt's long position.| Embla Medical vs. Danske Andelskassers Bank | Embla Medical vs. Hvidbjerg Bank | Embla Medical vs. Scandinavian Investment Group | Embla Medical vs. Laan Spar Bank |
| BankIn Bredygt vs. Nordea Bank Abp | BankIn Bredygt vs. Embla Medical hf | BankIn Bredygt vs. Lollands Bank | BankIn Bredygt vs. Laan Spar Bank |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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