Correlation Between Embellence Group and Nederman Holding

Can any of the company-specific risk be diversified away by investing in both Embellence Group and Nederman Holding 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 Nederman Holding 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 Nederman Holding AB, you can compare the effects of market volatilities on Embellence Group and Nederman Holding 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 Nederman Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Embellence Group and Nederman Holding.

Diversification Opportunities for Embellence Group and Nederman Holding

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Correlation Coefficient

Embellence Group  Nederman Holding

Pay attention - limited upside

The 3 months correlation between Embellence and Nederman is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Embellence Group AB and Nederman Holding AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nederman Holding 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 Nederman Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nederman Holding has no effect on the direction of Embellence Group i.e., Embellence Group and Nederman Holding go up and down completely randomly.

Pair Corralation between Embellence Group and Nederman Holding

If you would invest (100.00) in Embellence Group AB on October 23, 2024 and sell it today you would earn a total of  100.00  from holding Embellence Group AB or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Embellence Group AB  vs.  Nederman Holding AB

Embellence Group

Risk-Adjusted Performance

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Very Weak

Over the last 90 days Embellence Group AB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental drivers, Embellence Group is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Nederman Holding

Risk-Adjusted Performance

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Very Weak

Over the last 90 days Nederman Holding AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Embellence Group and Nederman Holding

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

The idea behind Embellence Group AB and Nederman Holding AB 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.