Correlation Between IA Invest and Embla Medical
Can any of the company-specific risk be diversified away by investing in both IA Invest 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 IA Invest and Embla Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IA Invest Peruma and Embla Medical hf, you can compare the effects of market volatilities on IA Invest 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 IA Invest with a short position of Embla Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of IA Invest and Embla Medical.
Diversification Opportunities for IA Invest and Embla Medical
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between IAIPGA and Embla is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding IA Invest Peruma 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 IA Invest 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 IA Invest Peruma 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 IA Invest i.e., IA Invest and Embla Medical go up and down completely randomly.
Pair Corralation between IA Invest and Embla Medical
Assuming the 90 days trading horizon IA Invest Peruma is expected to generate 0.97 times more return on investment than Embla Medical. However, IA Invest Peruma is 1.03 times less risky than Embla Medical. It trades about -0.01 of its potential returns per unit of risk. Embla Medical hf is currently generating about -0.02 per unit of risk. If you would invest 13,625 in IA Invest Peruma on September 24, 2024 and sell it today you would lose (45.00) from holding IA Invest Peruma or give up 0.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 68.18% |
| Values | Daily Returns |
IA Invest Peruma vs. Embla Medical hf
Performance |
| Timeline |
| IA Invest Peruma |
| Embla Medical hf |
IA Invest and Embla Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IA Invest and Embla Medical
The main advantage of trading using opposite IA Invest and Embla Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IA Invest 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.| IA Invest vs. Embla Medical hf | IA Invest vs. Jyske Bank AS | IA Invest vs. Moens Bank AS | IA Invest vs. PARKEN Sport Entertainment |
| Embla Medical vs. Novo Nordisk AS | Embla Medical vs. Nordea Bank Abp | Embla Medical vs. DSV Panalpina AS | Embla Medical vs. AP Mller |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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