Correlation Between Embla Medical and Nordinvestments
Can any of the company-specific risk be diversified away by investing in both Embla Medical and Nordinvestments 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 Nordinvestments 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 Nordinvestments AS, you can compare the effects of market volatilities on Embla Medical and Nordinvestments 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 Nordinvestments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Embla Medical and Nordinvestments.
Diversification Opportunities for Embla Medical and Nordinvestments
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Embla and Nordinvestments is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Embla Medical hf and Nordinvestments AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nordinvestments 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 Nordinvestments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nordinvestments AS has no effect on the direction of Embla Medical i.e., Embla Medical and Nordinvestments go up and down completely randomly.
Pair Corralation between Embla Medical and Nordinvestments
Assuming the 90 days trading horizon Embla Medical hf is expected to generate 0.35 times more return on investment than Nordinvestments. However, Embla Medical hf is 2.83 times less risky than Nordinvestments. It trades about 0.03 of its potential returns per unit of risk. Nordinvestments AS is currently generating about 0.0 per unit of risk. If you would invest 3,100 in Embla Medical hf on August 31, 2024 and sell it today you would earn a total of 390.00 from holding Embla Medical hf or generate 12.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.73% |
| Values | Daily Returns |
Embla Medical hf vs. Nordinvestments AS
Performance |
| Timeline |
| Embla Medical hf |
| Nordinvestments AS |
Embla Medical and Nordinvestments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Embla Medical and Nordinvestments
The main advantage of trading using opposite Embla Medical and Nordinvestments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Embla Medical position performs unexpectedly, Nordinvestments 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 Nordinvestments will offset losses from the drop in Nordinvestments' long position.| Embla Medical vs. Prime Office AS | Embla Medical vs. Dataproces Group AS | Embla Medical vs. Strategic Investments AS | Embla Medical vs. NTG Nordic Transport |
| Nordinvestments vs. Dataproces Group AS | Nordinvestments vs. Sparinvest INDEX Globale | Nordinvestments vs. Bavarian Nordic | Nordinvestments vs. Investeringsselskabet Luxor 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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