Correlation Between Embla Medical and Carnegie Wealth
Can any of the company-specific risk be diversified away by investing in both Embla Medical and Carnegie Wealth 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 Carnegie Wealth 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 Carnegie Wealth Management, you can compare the effects of market volatilities on Embla Medical and Carnegie Wealth 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 Carnegie Wealth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Embla Medical and Carnegie Wealth.
Diversification Opportunities for Embla Medical and Carnegie Wealth
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Embla and Carnegie is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Embla Medical hf and Carnegie Wealth Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carnegie Wealth Mana 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 Carnegie Wealth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carnegie Wealth Mana has no effect on the direction of Embla Medical i.e., Embla Medical and Carnegie Wealth go up and down completely randomly.
Pair Corralation between Embla Medical and Carnegie Wealth
Assuming the 90 days trading horizon Embla Medical hf is expected to generate 1.77 times more return on investment than Carnegie Wealth. However, Embla Medical is 1.77 times more volatile than Carnegie Wealth Management. It trades about 0.04 of its potential returns per unit of risk. Carnegie Wealth Management is currently generating about 0.04 per unit of risk. If you would invest 3,000 in Embla Medical hf on October 18, 2024 and sell it today you would earn a total of 430.00 from holding Embla Medical hf or generate 14.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 98.37% |
| Values | Daily Returns |
Embla Medical hf vs. Carnegie Wealth Management
Performance |
| Timeline |
| Embla Medical hf |
| Carnegie Wealth Mana |
Embla Medical and Carnegie Wealth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Embla Medical and Carnegie Wealth
The main advantage of trading using opposite Embla Medical and Carnegie Wealth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Embla Medical position performs unexpectedly, Carnegie Wealth 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 Carnegie Wealth will offset losses from the drop in Carnegie Wealth's long position.| Embla Medical vs. Sydbank AS | Embla Medical vs. NTG Nordic Transport | Embla Medical vs. PARKEN Sport Entertainment | Embla Medical vs. Lollands Bank |
| Carnegie Wealth vs. Danske Andelskassers Bank | Carnegie Wealth vs. Embla Medical hf | Carnegie Wealth vs. BankInv Kort HY | Carnegie Wealth vs. Groenlandsbanken AS |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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