Correlation Between Konami Holdings and Embracer Group
Can any of the company-specific risk be diversified away by investing in both Konami Holdings and Embracer Group 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 Konami Holdings and Embracer Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Konami Holdings and Embracer Group AB, you can compare the effects of market volatilities on Konami Holdings and Embracer Group 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 Konami Holdings with a short position of Embracer Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Konami Holdings and Embracer Group.
Diversification Opportunities for Konami Holdings and Embracer Group
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Konami and Embracer is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Konami Holdings and Embracer Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Embracer Group AB and Konami Holdings 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 Konami Holdings are associated (or correlated) with Embracer Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Embracer Group AB has no effect on the direction of Konami Holdings i.e., Konami Holdings and Embracer Group go up and down completely randomly.
Pair Corralation between Konami Holdings and Embracer Group
Assuming the 90 days horizon Konami Holdings is expected to under-perform the Embracer Group. But the pink sheet apears to be less risky and, when comparing its historical volatility, Konami Holdings is 2.16 times less risky than Embracer Group. The pink sheet trades about -0.02 of its potential returns per unit of risk. The Embracer Group AB is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 1,624 in Embracer Group AB on October 22, 2024 and sell it today you would earn a total of 104.00 from holding Embracer Group AB or generate 6.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 94.74% |
| Values | Daily Returns |
Konami Holdings vs. Embracer Group AB
Performance |
| Timeline |
| Konami Holdings |
| Embracer Group AB |
Konami Holdings and Embracer Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Konami Holdings and Embracer Group
The main advantage of trading using opposite Konami Holdings and Embracer Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Konami Holdings position performs unexpectedly, Embracer Group 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 Embracer Group will offset losses from the drop in Embracer Group's long position.| Konami Holdings vs. NEXON Co | Konami Holdings vs. Sega Sammy Holdings | Konami Holdings vs. Capcom Co Ltd | Konami Holdings vs. CD Projekt SA |
| Embracer Group vs. Square Enix Holdings | Embracer Group vs. Capcom Co | Embracer Group vs. CD Projekt SA | Embracer Group vs. Sega Sammy Holdings |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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