Correlation Between Embla Medical and TROPHY GAMES
Can any of the company-specific risk be diversified away by investing in both Embla Medical and TROPHY GAMES 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 TROPHY GAMES 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 TROPHY GAMES Development, you can compare the effects of market volatilities on Embla Medical and TROPHY GAMES 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 TROPHY GAMES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Embla Medical and TROPHY GAMES.
Diversification Opportunities for Embla Medical and TROPHY GAMES
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Embla and TROPHY is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Embla Medical hf and TROPHY GAMES Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TROPHY GAMES Development 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 TROPHY GAMES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TROPHY GAMES Development has no effect on the direction of Embla Medical i.e., Embla Medical and TROPHY GAMES go up and down completely randomly.
Pair Corralation between Embla Medical and TROPHY GAMES
Assuming the 90 days trading horizon Embla Medical hf is expected to generate 0.55 times more return on investment than TROPHY GAMES. However, Embla Medical hf is 1.83 times less risky than TROPHY GAMES. It trades about 0.2 of its potential returns per unit of risk. TROPHY GAMES Development is currently generating about 0.0 per unit of risk. If you would invest 3,030 in Embla Medical hf on August 29, 2024 and sell it today you would earn a total of 570.00 from holding Embla Medical hf or generate 18.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Embla Medical hf vs. TROPHY GAMES Development
Performance |
| Timeline |
| Embla Medical hf |
| TROPHY GAMES Development |
Embla Medical and TROPHY GAMES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Embla Medical and TROPHY GAMES
The main advantage of trading using opposite Embla Medical and TROPHY GAMES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Embla Medical position performs unexpectedly, TROPHY GAMES 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 TROPHY GAMES will offset losses from the drop in TROPHY GAMES's long position.| Embla Medical vs. Sydbank AS | Embla Medical vs. PARKEN Sport Entertainment | Embla Medical vs. Nordea Bank Abp | Embla Medical vs. Strategic Investments 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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