Correlation Between Scandinavian Investment and Embla Medical
Can any of the company-specific risk be diversified away by investing in both Scandinavian Investment 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 Scandinavian Investment and Embla Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Scandinavian Investment Group and Embla Medical hf, you can compare the effects of market volatilities on Scandinavian Investment 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 Scandinavian Investment with a short position of Embla Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scandinavian Investment and Embla Medical.
Diversification Opportunities for Scandinavian Investment and Embla Medical
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Scandinavian and Embla is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Scandinavian Investment Group 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 Scandinavian Investment 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 Scandinavian Investment Group 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 Scandinavian Investment i.e., Scandinavian Investment and Embla Medical go up and down completely randomly.
Pair Corralation between Scandinavian Investment and Embla Medical
Assuming the 90 days trading horizon Scandinavian Investment Group is expected to generate 1.21 times more return on investment than Embla Medical. However, Scandinavian Investment is 1.21 times more volatile than Embla Medical hf. It trades about 0.03 of its potential returns per unit of risk. Embla Medical hf is currently generating about -0.04 per unit of risk. If you would invest 324.00 in Scandinavian Investment Group on October 22, 2024 and sell it today you would earn a total of 4.00 from holding Scandinavian Investment Group or generate 1.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 97.44% |
| Values | Daily Returns |
Scandinavian Investment Group vs. Embla Medical hf
Performance |
| Timeline |
| Scandinavian Investment |
| Embla Medical hf |
Scandinavian Investment and Embla Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Scandinavian Investment and Embla Medical
The main advantage of trading using opposite Scandinavian Investment and Embla Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scandinavian Investment 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.| Scandinavian Investment vs. North Media AS | Scandinavian Investment vs. Rovsing AS | Scandinavian Investment vs. Alm Brand | Scandinavian Investment vs. SKAKO AS |
| Embla Medical vs. Danske Andelskassers Bank | Embla Medical vs. Hvidbjerg Bank | Embla Medical vs. Scandinavian Investment Group | Embla Medical vs. Laan Spar Bank |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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