Correlation Between Embla Medical and Laan Spar
Can any of the company-specific risk be diversified away by investing in both Embla Medical and Laan Spar 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 Laan Spar 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 Laan Spar Bank, you can compare the effects of market volatilities on Embla Medical and Laan Spar 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 Laan Spar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Embla Medical and Laan Spar.
Diversification Opportunities for Embla Medical and Laan Spar
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Embla and Laan is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Embla Medical hf and Laan Spar Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Laan Spar Bank 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 Laan Spar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Laan Spar Bank has no effect on the direction of Embla Medical i.e., Embla Medical and Laan Spar go up and down completely randomly.
Pair Corralation between Embla Medical and Laan Spar
Assuming the 90 days trading horizon Embla Medical is expected to generate 14.0 times less return on investment than Laan Spar. In addition to that, Embla Medical is 1.69 times more volatile than Laan Spar Bank. It trades about 0.02 of its total potential returns per unit of risk. Laan Spar Bank is currently generating about 0.38 per unit of volatility. If you would invest 69,000 in Laan Spar Bank on November 28, 2024 and sell it today you would earn a total of 7,500 from holding Laan Spar Bank or generate 10.87% 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. Laan Spar Bank
Performance |
| Timeline |
| Embla Medical hf |
| Laan Spar Bank |
Embla Medical and Laan Spar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Embla Medical and Laan Spar
The main advantage of trading using opposite Embla Medical and Laan Spar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Embla Medical position performs unexpectedly, Laan Spar 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 Laan Spar will offset losses from the drop in Laan Spar's long position.| Embla Medical vs. Carnegie Wealth Management | Embla Medical vs. BankInv Kort HY | Embla Medical vs. Scandinavian Medical Solutions | Embla Medical vs. Moens Bank AS |
| Laan Spar vs. Vestjysk Bank AS | Laan Spar vs. Skjern Bank AS | Laan Spar vs. Groenlandsbanken AS | Laan Spar vs. Kreditbanken 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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