Correlation Between Embracer Group and Evolution
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By analyzing existing cross correlation between Embracer Group AB and Evolution AB, you can compare the effects of market volatilities on Embracer Group and Evolution 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 Embracer Group with a short position of Evolution. Check out your portfolio center. Please also check ongoing floating volatility patterns of Embracer Group and Evolution.
Diversification Opportunities for Embracer Group and Evolution
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Embracer and Evolution is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Embracer Group AB and Evolution AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evolution AB and Embracer Group 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 Embracer Group AB are associated (or correlated) with Evolution. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Evolution AB has no effect on the direction of Embracer Group i.e., Embracer Group and Evolution go up and down completely randomly.
Pair Corralation between Embracer Group and Evolution
Assuming the 90 days trading horizon Embracer Group AB is expected to generate 1.2 times more return on investment than Evolution. However, Embracer Group is 1.2 times more volatile than Evolution AB. It trades about 0.08 of its potential returns per unit of risk. Evolution AB is currently generating about -0.15 per unit of risk. If you would invest 18,696 in Embracer Group AB on October 20, 2024 and sell it today you would earn a total of 804.00 from holding Embracer Group AB or generate 4.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Embracer Group AB vs. Evolution AB
Performance |
| Timeline |
| Embracer Group AB |
| Evolution AB |
Embracer Group and Evolution Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Embracer Group and Evolution
The main advantage of trading using opposite Embracer Group and Evolution positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Embracer Group position performs unexpectedly, Evolution 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 Evolution will offset losses from the drop in Evolution's long position.| Embracer Group vs. Evolution AB | Embracer Group vs. Sinch AB | Embracer Group vs. Samhllsbyggnadsbolaget i Norden | Embracer Group vs. Stillfront Group AB |
| Evolution vs. Embracer Group AB | Evolution vs. Sinch AB | Evolution vs. Kambi Group PLC | Evolution vs. Samhllsbyggnadsbolaget i Norden |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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