Correlation Between Sega Sammy and Embracer Group
Can any of the company-specific risk be diversified away by investing in both Sega Sammy 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 Sega Sammy and Embracer Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sega Sammy Holdings and Embracer Group AB, you can compare the effects of market volatilities on Sega Sammy 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 Sega Sammy with a short position of Embracer Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sega Sammy and Embracer Group.
Diversification Opportunities for Sega Sammy and Embracer Group
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Sega and Embracer is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Sega Sammy 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 Sega Sammy 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 Sega Sammy 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 Sega Sammy i.e., Sega Sammy and Embracer Group go up and down completely randomly.
Pair Corralation between Sega Sammy and Embracer Group
Assuming the 90 days horizon Sega Sammy Holdings is expected to generate 1.6 times more return on investment than Embracer Group. However, Sega Sammy is 1.6 times more volatile than Embracer Group AB. It trades about 0.13 of its potential returns per unit of risk. Embracer Group AB is currently generating about 0.16 per unit of risk. If you would invest 422.00 in Sega Sammy Holdings on October 22, 2024 and sell it today you would earn a total of 33.00 from holding Sega Sammy Holdings or generate 7.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sega Sammy Holdings vs. Embracer Group AB
Performance |
| Timeline |
| Sega Sammy Holdings |
| Embracer Group AB |
Sega Sammy and Embracer Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sega Sammy and Embracer Group
The main advantage of trading using opposite Sega Sammy and Embracer Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sega Sammy 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.| Sega Sammy vs. Nexon Co Ltd | Sega Sammy vs. Square Enix Holdings | Sega Sammy vs. Nintendo Co | Sega Sammy vs. Square Enix Holdings |
| 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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