Correlation Between Erria AS and Embla Medical
Can any of the company-specific risk be diversified away by investing in both Erria AS and Embla Medical at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Erria AS and Embla Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Erria AS and Embla Medical hf, you can compare the effects of market volatilities on Erria AS and Embla Medical 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 Erria AS with a short position of Embla Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Erria AS and Embla Medical.
Diversification Opportunities for Erria AS and Embla Medical
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Erria and Embla is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Erria AS and Embla Medical hf in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Embla Medical hf and Erria AS 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 Erria AS are associated (or correlated) with Embla Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Embla Medical hf has no effect on the direction of Erria AS i.e., Erria AS and Embla Medical go up and down completely randomly.
Pair Corralation between Erria AS and Embla Medical
Assuming the 90 days trading horizon Erria AS is expected to generate 2.13 times more return on investment than Embla Medical. However, Erria AS is 2.13 times more volatile than Embla Medical hf. It trades about 0.02 of its potential returns per unit of risk. Embla Medical hf is currently generating about 0.01 per unit of risk. If you would invest 492.00 in Erria AS on December 2, 2024 and sell it today you would earn a total of 2.00 from holding Erria AS or generate 0.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Erria AS vs. Embla Medical hf
Performance |
| Timeline |
| Erria AS |
| Embla Medical hf |
Erria AS and Embla Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Erria AS and Embla Medical
The main advantage of trading using opposite Erria AS and Embla Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Erria AS position performs unexpectedly, Embla Medical 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 Embla Medical will offset losses from the drop in Embla Medical's long position.| Erria AS vs. Nordinvestments AS | Erria AS vs. Moens Bank AS | Erria AS vs. Strategic Investments AS | Erria AS vs. Cessatech AS |
| Embla Medical vs. Djurslands Bank | Embla Medical vs. Nordfyns Bank AS | Embla Medical vs. Hvidbjerg Bank | Embla Medical vs. Danske Andelskassers Bank |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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