Correlation Between Embla Medical and LED IBond
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By analyzing existing cross correlation between Embla Medical hf and LED iBond International, you can compare the effects of market volatilities on Embla Medical and LED IBond 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 LED IBond. Check out your portfolio center. Please also check ongoing floating volatility patterns of Embla Medical and LED IBond.
Diversification Opportunities for Embla Medical and LED IBond
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Embla and LED is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Embla Medical hf and LED iBond International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LED iBond International 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 LED IBond. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LED iBond International has no effect on the direction of Embla Medical i.e., Embla Medical and LED IBond go up and down completely randomly.
Pair Corralation between Embla Medical and LED IBond
Assuming the 90 days trading horizon Embla Medical is expected to generate 10.72 times less return on investment than LED IBond. But when comparing it to its historical volatility, Embla Medical hf is 5.28 times less risky than LED IBond. It trades about 0.01 of its potential returns per unit of risk. LED iBond International is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 85.00 in LED iBond International on December 8, 2024 and sell it today you would lose (65.00) from holding LED iBond International or give up 76.47% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Embla Medical hf vs. LED iBond International
Performance |
| Timeline |
| Embla Medical hf |
| LED iBond International |
Embla Medical and LED IBond Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Embla Medical and LED IBond
The main advantage of trading using opposite Embla Medical and LED IBond positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Embla Medical position performs unexpectedly, LED IBond 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 LED IBond will offset losses from the drop in LED IBond's long position.| Embla Medical vs. BankInv Kort HY | ||
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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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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