Correlation Between Swedencare Publ and Embellence Group
Can any of the company-specific risk be diversified away by investing in both Swedencare Publ and Embellence 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 Swedencare Publ and Embellence Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Swedencare publ AB and Embellence Group AB, you can compare the effects of market volatilities on Swedencare Publ and Embellence 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 Swedencare Publ with a short position of Embellence Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Swedencare Publ and Embellence Group.
Diversification Opportunities for Swedencare Publ and Embellence Group
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Swedencare and Embellence is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Swedencare publ AB and Embellence Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Embellence Group and Swedencare Publ 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 Swedencare publ AB are associated (or correlated) with Embellence Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Embellence Group has no effect on the direction of Swedencare Publ i.e., Swedencare Publ and Embellence Group go up and down completely randomly.
Pair Corralation between Swedencare Publ and Embellence Group
Assuming the 90 days trading horizon Swedencare publ AB is expected to generate 1.48 times more return on investment than Embellence Group. However, Swedencare Publ is 1.48 times more volatile than Embellence Group AB. It trades about 0.04 of its potential returns per unit of risk. Embellence Group AB is currently generating about 0.05 per unit of risk. If you would invest 3,576 in Swedencare publ AB on September 3, 2024 and sell it today you would earn a total of 1,384 from holding Swedencare publ AB or generate 38.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Swedencare publ AB vs. Embellence Group AB
Performance |
| Timeline |
| Swedencare publ AB |
| Embellence Group |
Swedencare Publ and Embellence Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Swedencare Publ and Embellence Group
The main advantage of trading using opposite Swedencare Publ and Embellence Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Swedencare Publ position performs unexpectedly, Embellence 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 Embellence Group will offset losses from the drop in Embellence Group's long position.| Swedencare Publ vs. Svenska Handelsbanken AB | Swedencare Publ vs. Soder Sportfiske AB | Swedencare Publ vs. Nexam Chemical Holding | Swedencare Publ vs. SaveLend Group AB |
| Embellence Group vs. Rugvista Group AB | Embellence Group vs. Nimbus Group AB | Embellence Group vs. Desenio Group AB | Embellence Group vs. Idun Industrier 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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