Correlation Between Embracer Group and Leading Edge
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By analyzing existing cross correlation between Embracer Group AB and Leading Edge Materials, you can compare the effects of market volatilities on Embracer Group and Leading Edge 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 Leading Edge. Check out your portfolio center. Please also check ongoing floating volatility patterns of Embracer Group and Leading Edge.
Diversification Opportunities for Embracer Group and Leading Edge
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Embracer and Leading is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Embracer Group AB and Leading Edge Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Leading Edge Materials 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 Leading Edge. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Leading Edge Materials has no effect on the direction of Embracer Group i.e., Embracer Group and Leading Edge go up and down completely randomly.
Pair Corralation between Embracer Group and Leading Edge
Assuming the 90 days trading horizon Embracer Group AB is expected to generate 0.91 times more return on investment than Leading Edge. However, Embracer Group AB is 1.1 times less risky than Leading Edge. It trades about 0.05 of its potential returns per unit of risk. Leading Edge Materials is currently generating about -0.03 per unit of risk. If you would invest 16,275 in Embracer Group AB on November 5, 2024 and sell it today you would earn a total of 6,225 from holding Embracer Group AB or generate 38.25% 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. Leading Edge Materials
Performance |
| Timeline |
| Embracer Group AB |
| Leading Edge Materials |
Embracer Group and Leading Edge Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Embracer Group and Leading Edge
The main advantage of trading using opposite Embracer Group and Leading Edge positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Embracer Group position performs unexpectedly, Leading Edge 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 Leading Edge will offset losses from the drop in Leading Edge'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 |
| Leading Edge vs. Boliden AB | Leading Edge vs. AAC Clyde Space | Leading Edge vs. Tele2 AB | Leading Edge vs. BillerudKorsnas 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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