Correlation Between Embracer Group and Konami Holdings
Can any of the company-specific risk be diversified away by investing in both Embracer Group and Konami Holdings 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 Embracer Group and Konami Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Embracer Group AB and Konami Holdings, you can compare the effects of market volatilities on Embracer Group and Konami Holdings 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 Embracer Group with a short position of Konami Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Embracer Group and Konami Holdings.
Diversification Opportunities for Embracer Group and Konami Holdings
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Embracer and Konami is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Embracer Group AB and Konami Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Konami Holdings and Embracer Group 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 Embracer Group AB are associated (or correlated) with Konami Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Konami Holdings has no effect on the direction of Embracer Group i.e., Embracer Group and Konami Holdings go up and down completely randomly.
Pair Corralation between Embracer Group and Konami Holdings
Assuming the 90 days horizon Embracer Group AB is expected to generate 1.04 times more return on investment than Konami Holdings. However, Embracer Group is 1.04 times more volatile than Konami Holdings. It trades about 0.22 of its potential returns per unit of risk. Konami Holdings is currently generating about -0.01 per unit of risk. If you would invest 1,653 in Embracer Group AB on November 3, 2024 and sell it today you would earn a total of 177.00 from holding Embracer Group AB or generate 10.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Embracer Group AB vs. Konami Holdings
Performance |
| Timeline |
| Embracer Group AB |
| Konami Holdings |
Embracer Group and Konami Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Embracer Group and Konami Holdings
The main advantage of trading using opposite Embracer Group and Konami Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Embracer Group position performs unexpectedly, Konami Holdings 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 Konami Holdings will offset losses from the drop in Konami Holdings' long position.| Embracer Group vs. Square Enix Holdings | Embracer Group vs. Capcom Co | Embracer Group vs. CD Projekt SA | Embracer Group vs. Sega Sammy Holdings |
| Konami Holdings vs. NEXON Co | Konami Holdings vs. Sega Sammy Holdings | Konami Holdings vs. Capcom Co Ltd | Konami Holdings vs. CD Projekt SA |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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