Correlation Between Embracer Group and Fagerhult
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By analyzing existing cross correlation between Embracer Group AB and Fagerhult AB, you can compare the effects of market volatilities on Embracer Group and Fagerhult 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 Fagerhult. Check out your portfolio center. Please also check ongoing floating volatility patterns of Embracer Group and Fagerhult.
Diversification Opportunities for Embracer Group and Fagerhult
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Embracer and Fagerhult is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Embracer Group AB and Fagerhult AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fagerhult 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 Fagerhult. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fagerhult AB has no effect on the direction of Embracer Group i.e., Embracer Group and Fagerhult go up and down completely randomly.
Pair Corralation between Embracer Group and Fagerhult
Assuming the 90 days trading horizon Embracer Group AB is expected to generate 2.46 times more return on investment than Fagerhult. However, Embracer Group is 2.46 times more volatile than Fagerhult AB. It trades about 0.12 of its potential returns per unit of risk. Fagerhult AB is currently generating about -0.19 per unit of risk. If you would invest 2,357 in Embracer Group AB on September 2, 2024 and sell it today you would earn a total of 520.00 from holding Embracer Group AB or generate 22.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Embracer Group AB vs. Fagerhult AB
Performance |
| Timeline |
| Embracer Group AB |
| Fagerhult AB |
Embracer Group and Fagerhult Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Embracer Group and Fagerhult
The main advantage of trading using opposite Embracer Group and Fagerhult positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Embracer Group position performs unexpectedly, Fagerhult 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 Fagerhult will offset losses from the drop in Fagerhult'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 |
| Fagerhult vs. Samhllsbyggnadsbolaget i Norden | Fagerhult vs. Sinch AB | Fagerhult vs. Embracer Group AB | Fagerhult vs. Evolution AB |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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