Correlation Between Embracer Group and Profoto Holding
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By analyzing existing cross correlation between Embracer Group AB and Profoto Holding AB, you can compare the effects of market volatilities on Embracer Group and Profoto Holding 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 Profoto Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Embracer Group and Profoto Holding.
Diversification Opportunities for Embracer Group and Profoto Holding
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Embracer and Profoto is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Embracer Group AB and Profoto Holding AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Profoto Holding 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 Profoto Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Profoto Holding AB has no effect on the direction of Embracer Group i.e., Embracer Group and Profoto Holding go up and down completely randomly.
Pair Corralation between Embracer Group and Profoto Holding
Assuming the 90 days trading horizon Embracer Group AB is expected to generate 1.57 times more return on investment than Profoto Holding. However, Embracer Group is 1.57 times more volatile than Profoto Holding AB. It trades about 0.18 of its potential returns per unit of risk. Profoto Holding AB is currently generating about -0.11 per unit of risk. If you would invest 20,022 in Embracer Group AB on November 3, 2024 and sell it today you would earn a total of 2,478 from holding Embracer Group AB or generate 12.38% 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. Profoto Holding AB
Performance |
| Timeline |
| Embracer Group AB |
| Profoto Holding AB |
Embracer Group and Profoto Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Embracer Group and Profoto Holding
The main advantage of trading using opposite Embracer Group and Profoto Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Embracer Group position performs unexpectedly, Profoto Holding 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 Profoto Holding will offset losses from the drop in Profoto Holding'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 |
| Profoto Holding vs. eEducation Albert AB | Profoto Holding vs. White Pearl Technology | Profoto Holding vs. Investment AB Oresund | Profoto Holding vs. USWE Sports 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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