Correlation Between Embark Technology and Dave Warrants

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

By analyzing existing cross correlation between Embark Technology and Dave Warrants, you can compare the effects of market volatilities on Embark Technology and Dave Warrants 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 Embark Technology with a short position of Dave Warrants. Check out your portfolio center. Please also check ongoing floating volatility patterns of Embark Technology and Dave Warrants.

Diversification Opportunities for Embark Technology and Dave Warrants

0.07

Correlation Coefficient

Embark Technology  Dave Warrants

Significant diversification

The 3 months correlation between Embark and Dave is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Embark Technology and Dave Warrants in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dave Warrants and Embark Technology 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 Embark Technology are associated (or correlated) with Dave Warrants. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dave Warrants has no effect on the direction of Embark Technology i.e., Embark Technology and Dave Warrants go up and down completely randomly.

Pair Corralation between Embark Technology and Dave Warrants

If you would invest  282.00  in Embark Technology on October 10, 2024 and sell it today you would earn a total of  0.00  from holding Embark Technology or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	5.0%
Values	Daily Returns

Embark Technology  vs.  Dave Warrants

Embark Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Embark Technology has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent fundamental drivers, Embark Technology is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Dave Warrants

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Dave Warrants are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal technical and fundamental indicators, Dave Warrants showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Embark Technology and Dave Warrants

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

The idea behind Embark Technology and Dave Warrants 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.