Correlation Between Embla Medical and IA Invest
Can any of the company-specific risk be diversified away by investing in both Embla Medical and IA Invest 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 IA Invest 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 IA Invest Peruma, you can compare the effects of market volatilities on Embla Medical and IA Invest 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 IA Invest. Check out your portfolio center. Please also check ongoing floating volatility patterns of Embla Medical and IA Invest.
Diversification Opportunities for Embla Medical and IA Invest
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Embla and IAIPGA is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Embla Medical hf and IA Invest Peruma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IA Invest Peruma 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 IA Invest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IA Invest Peruma has no effect on the direction of Embla Medical i.e., Embla Medical and IA Invest go up and down completely randomly.
Pair Corralation between Embla Medical and IA Invest
Assuming the 90 days trading horizon Embla Medical hf is expected to under-perform the IA Invest. In addition to that, Embla Medical is 1.03 times more volatile than IA Invest Peruma. It trades about -0.02 of its total potential returns per unit of risk. IA Invest Peruma is currently generating about -0.01 per unit of volatility. If you would invest 13,625 in IA Invest Peruma on September 24, 2024 and sell it today you would lose (45.00) from holding IA Invest Peruma or give up 0.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 68.18% |
| Values | Daily Returns |
Embla Medical hf vs. IA Invest Peruma
Performance |
| Timeline |
| Embla Medical hf |
| IA Invest Peruma |
Embla Medical and IA Invest Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Embla Medical and IA Invest
The main advantage of trading using opposite Embla Medical and IA Invest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Embla Medical position performs unexpectedly, IA Invest 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 IA Invest will offset losses from the drop in IA Invest's long position.| Embla Medical vs. Novo Nordisk AS | Embla Medical vs. Nordea Bank Abp | Embla Medical vs. DSV Panalpina AS | Embla Medical vs. AP Mller |
| IA Invest vs. Embla Medical hf | IA Invest vs. Jyske Bank AS | IA Invest vs. Moens Bank AS | IA Invest vs. PARKEN Sport Entertainment |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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