Correlation Between Mixi and Embracer Group

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

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

Diversification Opportunities for Mixi and Embracer Group

0.0

Correlation Coefficient

Mixi  Embracer Group

Pay attention - limited upside

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

Pair Corralation between Mixi and Embracer Group

If you would invest  1,653  in Embracer Group AB on December 29, 2024 and sell it today you would lose (538.00) from holding Embracer Group AB or give up 32.55% of portfolio value over 90 days.

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

Mixi Inc  vs.  Embracer Group AB

Mixi Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Mixi Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable forward indicators, Mixi is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Embracer Group AB

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Embracer Group AB are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Embracer Group reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Mixi and Embracer Group

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

The idea behind Mixi Inc and Embracer Group 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.

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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.