Correlation Between Safe and Embracer Group
Can any of the company-specific risk be diversified away by investing in both Safe 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 Safe and Embracer Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Safe and Green and Embracer Group AB, you can compare the effects of market volatilities on Safe 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 Safe with a short position of Embracer Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Safe and Embracer Group.
Diversification Opportunities for Safe and Embracer Group
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Safe and Embracer is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Safe and Green 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 Safe 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 Safe and Green 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 Safe i.e., Safe and Embracer Group go up and down completely randomly.
Pair Corralation between Safe and Embracer Group
Considering the 90-day investment horizon Safe and Green is expected to under-perform the Embracer Group. In addition to that, Safe is 4.44 times more volatile than Embracer Group AB. It trades about -0.17 of its total potential returns per unit of risk. Embracer Group AB is currently generating about -0.29 per unit of volatility. If you would invest 284.00 in Embracer Group AB on August 27, 2024 and sell it today you would lose (39.00) from holding Embracer Group AB or give up 13.73% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Safe and Green vs. Embracer Group AB
Performance |
| Timeline |
| Safe and Green |
| Embracer Group AB |
Safe and Embracer Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Safe and Embracer Group
The main advantage of trading using opposite Safe and Embracer Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Safe 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.| Safe vs. Investcorp Credit Management | Safe vs. Medalist Diversified Reit | Safe vs. Aquagold International | Safe vs. Morningstar Unconstrained Allocation |
| 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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