Correlation Between Embellence Group and Northgold
Can any of the company-specific risk be diversified away by investing in both Embellence Group and Northgold 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 Northgold 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 Northgold AB, you can compare the effects of market volatilities on Embellence Group and Northgold 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 Northgold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Embellence Group and Northgold.
Diversification Opportunities for Embellence Group and Northgold
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Embellence and Northgold is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Embellence Group AB and Northgold AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Northgold AB 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 Northgold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Northgold AB has no effect on the direction of Embellence Group i.e., Embellence Group and Northgold go up and down completely randomly.
Pair Corralation between Embellence Group and Northgold
Assuming the 90 days trading horizon Embellence Group AB is expected to generate 0.39 times more return on investment than Northgold. However, Embellence Group AB is 2.55 times less risky than Northgold. It trades about 0.01 of its potential returns per unit of risk. Northgold AB is currently generating about -0.16 per unit of risk. If you would invest 3,020 in Embellence Group AB on September 25, 2024 and sell it today you would earn a total of 0.00 from holding Embellence Group AB or generate 0.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 95.45% |
Values | Daily Returns |
Embellence Group AB vs. Northgold AB
Performance |
Timeline |
Embellence Group |
Northgold AB |
Embellence Group and Northgold Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Embellence Group and Northgold
The main advantage of trading using opposite Embellence Group and Northgold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Embellence Group position performs unexpectedly, Northgold 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 Northgold will offset losses from the drop in Northgold's long position.Embellence Group vs. Rugvista Group AB | Embellence Group vs. Nimbus Group AB | Embellence Group vs. Desenio Group AB | Embellence Group vs. Idun Industrier AB |
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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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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