Correlation Between Embla Medical and Scandinavian Investment
Can any of the company-specific risk be diversified away by investing in both Embla Medical and Scandinavian Investment 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 Scandinavian Investment 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 Scandinavian Investment Group, you can compare the effects of market volatilities on Embla Medical and Scandinavian Investment 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 Scandinavian Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Embla Medical and Scandinavian Investment.
Diversification Opportunities for Embla Medical and Scandinavian Investment
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Embla and Scandinavian is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Embla Medical hf and Scandinavian Investment Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scandinavian Investment 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 Scandinavian Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scandinavian Investment has no effect on the direction of Embla Medical i.e., Embla Medical and Scandinavian Investment go up and down completely randomly.
Pair Corralation between Embla Medical and Scandinavian Investment
Assuming the 90 days trading horizon Embla Medical hf is expected to under-perform the Scandinavian Investment. In addition to that, Embla Medical is 1.09 times more volatile than Scandinavian Investment Group. It trades about -0.15 of its total potential returns per unit of risk. Scandinavian Investment Group is currently generating about -0.02 per unit of volatility. If you would invest 330.00 in Scandinavian Investment Group on November 3, 2024 and sell it today you would lose (4.00) from holding Scandinavian Investment Group or give up 1.21% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Embla Medical hf vs. Scandinavian Investment Group
Performance |
| Timeline |
| Embla Medical hf |
| Scandinavian Investment |
Embla Medical and Scandinavian Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Embla Medical and Scandinavian Investment
The main advantage of trading using opposite Embla Medical and Scandinavian Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Embla Medical position performs unexpectedly, Scandinavian Investment 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 Scandinavian Investment will offset losses from the drop in Scandinavian Investment's long position.| Embla Medical vs. Kreditbanken AS | Embla Medical vs. Skjern Bank AS | Embla Medical vs. Nordfyns Bank AS | Embla Medical vs. Prime Office AS |
| Scandinavian Investment vs. North Media AS | Scandinavian Investment vs. Rovsing AS | Scandinavian Investment vs. Alm Brand | Scandinavian Investment vs. SKAKO 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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