Correlation Between Embracer Group and Powercell Sweden
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By analyzing existing cross correlation between Embracer Group AB and Powercell Sweden, you can compare the effects of market volatilities on Embracer Group and Powercell Sweden 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 Powercell Sweden. Check out your portfolio center. Please also check ongoing floating volatility patterns of Embracer Group and Powercell Sweden.
Diversification Opportunities for Embracer Group and Powercell Sweden
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Embracer and Powercell is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Embracer Group AB and Powercell Sweden in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Powercell Sweden 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 Powercell Sweden. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Powercell Sweden has no effect on the direction of Embracer Group i.e., Embracer Group and Powercell Sweden go up and down completely randomly.
Pair Corralation between Embracer Group and Powercell Sweden
Assuming the 90 days trading horizon Embracer Group AB is expected to generate 1.11 times more return on investment than Powercell Sweden. However, Embracer Group is 1.11 times more volatile than Powercell Sweden. It trades about 0.0 of its potential returns per unit of risk. Powercell Sweden is currently generating about -0.05 per unit of risk. If you would invest 4,878 in Embracer Group AB on August 26, 2024 and sell it today you would lose (2,123) from holding Embracer Group AB or give up 43.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Embracer Group AB vs. Powercell Sweden
Performance |
| Timeline |
| Embracer Group AB |
| Powercell Sweden |
Embracer Group and Powercell Sweden Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Embracer Group and Powercell Sweden
The main advantage of trading using opposite Embracer Group and Powercell Sweden positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Embracer Group position performs unexpectedly, Powercell Sweden 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 Powercell Sweden will offset losses from the drop in Powercell Sweden's long position.| Embracer Group vs. Flexion Mobile PLC | Embracer Group vs. iZafe Group AB | Embracer Group vs. KABE Group AB | Embracer Group vs. IAR Systems Group |
| Powercell Sweden vs. Divio Technologies AB | Powercell Sweden vs. XMReality AB | Powercell Sweden vs. KABE Group AB | Powercell Sweden vs. IAR Systems Group |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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