Correlation Between Embracer Group and Paradox Interactive
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By analyzing existing cross correlation between Embracer Group AB and Paradox Interactive AB, you can compare the effects of market volatilities on Embracer Group and Paradox Interactive 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 Paradox Interactive. Check out your portfolio center. Please also check ongoing floating volatility patterns of Embracer Group and Paradox Interactive.
Diversification Opportunities for Embracer Group and Paradox Interactive
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Embracer and Paradox is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Embracer Group AB and Paradox Interactive AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Paradox Interactive 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 Paradox Interactive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Paradox Interactive has no effect on the direction of Embracer Group i.e., Embracer Group and Paradox Interactive go up and down completely randomly.
Pair Corralation between Embracer Group and Paradox Interactive
Assuming the 90 days trading horizon Embracer Group AB is expected to generate 2.47 times more return on investment than Paradox Interactive. However, Embracer Group is 2.47 times more volatile than Paradox Interactive AB. It trades about -0.06 of its potential returns per unit of risk. Paradox Interactive AB is currently generating about -0.29 per unit of risk. If you would invest 3,054 in Embracer Group AB on August 28, 2024 and sell it today you would lose (162.00) from holding Embracer Group AB or give up 5.3% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Embracer Group AB vs. Paradox Interactive AB
Performance |
| Timeline |
| Embracer Group AB |
| Paradox Interactive |
Embracer Group and Paradox Interactive Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Embracer Group and Paradox Interactive
The main advantage of trading using opposite Embracer Group and Paradox Interactive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Embracer Group position performs unexpectedly, Paradox Interactive 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 Paradox Interactive will offset losses from the drop in Paradox Interactive'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 |
| Paradox Interactive vs. Flexion Mobile PLC | Paradox Interactive vs. iZafe Group AB | Paradox Interactive vs. KABE Group AB | Paradox Interactive 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 Stocks Directory module to find actively traded stocks across global markets.
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