Correlation Between Vestjysk Bank and Embla Medical
Can any of the company-specific risk be diversified away by investing in both Vestjysk Bank 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 Vestjysk Bank and Embla Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vestjysk Bank AS and Embla Medical hf, you can compare the effects of market volatilities on Vestjysk Bank 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 Vestjysk Bank with a short position of Embla Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vestjysk Bank and Embla Medical.
Diversification Opportunities for Vestjysk Bank and Embla Medical
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Vestjysk and Embla is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Vestjysk Bank AS 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 Vestjysk Bank 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 Vestjysk Bank AS 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 Vestjysk Bank i.e., Vestjysk Bank and Embla Medical go up and down completely randomly.
Pair Corralation between Vestjysk Bank and Embla Medical
Assuming the 90 days trading horizon Vestjysk Bank AS is expected to generate 0.65 times more return on investment than Embla Medical. However, Vestjysk Bank AS is 1.54 times less risky than Embla Medical. It trades about 0.06 of its potential returns per unit of risk. Embla Medical hf is currently generating about 0.01 per unit of risk. If you would invest 302.00 in Vestjysk Bank AS on September 19, 2024 and sell it today you would earn a total of 126.00 from holding Vestjysk Bank AS or generate 41.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vestjysk Bank AS vs. Embla Medical hf
Performance |
| Timeline |
| Vestjysk Bank AS |
| Embla Medical hf |
Vestjysk Bank and Embla Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vestjysk Bank and Embla Medical
The main advantage of trading using opposite Vestjysk Bank and Embla Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vestjysk Bank 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.| Vestjysk Bank vs. Spar Nord Bank | Vestjysk Bank vs. Sydbank AS | Vestjysk Bank vs. Ringkjoebing Landbobank AS | Vestjysk Bank vs. Alm Brand |
| Embla Medical vs. Novo Nordisk AS | Embla Medical vs. Nordea Bank Abp | Embla Medical vs. DSV Panalpina AS | Embla Medical vs. AP Mller |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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