Correlation Between Embellence Group and Media

Can any of the company-specific risk be diversified away by investing in both Embellence Group and Media 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 Embellence Group and Media into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Embellence Group AB and Media and Games, you can compare the effects of market volatilities on Embellence Group and Media 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 Embellence Group with a short position of Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Embellence Group and Media.

Diversification Opportunities for Embellence Group and Media

-0.47

Correlation Coefficient

Embellence Group  Media

Very good diversification

The 3 months correlation between Embellence and Media is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Embellence Group AB and Media and Games in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Media and Games and Embellence 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 Embellence Group AB are associated (or correlated) with Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Media and Games has no effect on the direction of Embellence Group i.e., Embellence Group and Media go up and down completely randomly.

Pair Corralation between Embellence Group and Media

Assuming the 90 days trading horizon Embellence Group AB is expected to generate 0.51 times more return on investment than Media. However, Embellence Group AB is 1.94 times less risky than Media. It trades about 0.04 of its potential returns per unit of risk. Media and Games is currently generating about -0.03 per unit of risk. If you would invest  3,220  in Embellence Group AB on October 23, 2024 and sell it today you would earn a total of  110.00  from holding Embellence Group AB or generate 3.42% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.31%
Values	Daily Returns

Embellence Group AB  vs.  Media and Games

Embellence Group

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Embellence Group AB are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong fundamental drivers, Embellence Group is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Media and Games

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Media and Games has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's technical and fundamental indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Embellence Group and Media

The main advantage of trading using opposite Embellence Group and Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Embellence Group position performs unexpectedly, Media 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 Media will offset losses from the drop in Media's long position.

The idea behind Embellence Group AB and Media and Games pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.