Correlation Between Embla Medical and Carlsberg
Can any of the company-specific risk be diversified away by investing in both Embla Medical and Carlsberg 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 Carlsberg 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 Carlsberg AS, you can compare the effects of market volatilities on Embla Medical and Carlsberg 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 Carlsberg. Check out your portfolio center. Please also check ongoing floating volatility patterns of Embla Medical and Carlsberg.
Diversification Opportunities for Embla Medical and Carlsberg
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Embla and Carlsberg is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Embla Medical hf and Carlsberg AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carlsberg AS 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 Carlsberg. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carlsberg AS has no effect on the direction of Embla Medical i.e., Embla Medical and Carlsberg go up and down completely randomly.
Pair Corralation between Embla Medical and Carlsberg
Assuming the 90 days trading horizon Embla Medical hf is expected to generate 0.73 times more return on investment than Carlsberg. However, Embla Medical hf is 1.36 times less risky than Carlsberg. It trades about 0.06 of its potential returns per unit of risk. Carlsberg AS is currently generating about 0.04 per unit of risk. If you would invest 3,480 in Embla Medical hf on September 4, 2024 and sell it today you would earn a total of 50.00 from holding Embla Medical hf or generate 1.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Embla Medical hf vs. Carlsberg AS
Performance |
| Timeline |
| Embla Medical hf |
| Carlsberg AS |
Embla Medical and Carlsberg Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Embla Medical and Carlsberg
The main advantage of trading using opposite Embla Medical and Carlsberg positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Embla Medical position performs unexpectedly, Carlsberg 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 Carlsberg will offset losses from the drop in Carlsberg's long position.| Embla Medical vs. Laan Spar Bank | Embla Medical vs. Nordinvestments AS | Embla Medical vs. Lollands Bank | Embla Medical vs. Jyske Bank AS |
| Carlsberg vs. TROPHY GAMES Development | Carlsberg vs. Nordinvestments AS | Carlsberg vs. Alefarm Brewing AS | Carlsberg vs. Djurslands 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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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