Correlation Between Adventure Box and Firefly AB
Can any of the company-specific risk be diversified away by investing in both Adventure Box and Firefly AB 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 Adventure Box and Firefly AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Adventure Box Technology and Firefly AB, you can compare the effects of market volatilities on Adventure Box and Firefly AB 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 Adventure Box with a short position of Firefly AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Adventure Box and Firefly AB.
Diversification Opportunities for Adventure Box and Firefly AB
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Adventure and Firefly is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Adventure Box Technology and Firefly AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Firefly AB and Adventure Box 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 Adventure Box Technology are associated (or correlated) with Firefly AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Firefly AB has no effect on the direction of Adventure Box i.e., Adventure Box and Firefly AB go up and down completely randomly.
Pair Corralation between Adventure Box and Firefly AB
Assuming the 90 days trading horizon Adventure Box Technology is expected to under-perform the Firefly AB. In addition to that, Adventure Box is 1.94 times more volatile than Firefly AB. It trades about -0.4 of its total potential returns per unit of risk. Firefly AB is currently generating about 0.0 per unit of volatility. If you would invest 17,750 in Firefly AB on October 25, 2024 and sell it today you would lose (100.00) from holding Firefly AB or give up 0.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Adventure Box Technology vs. Firefly AB
Performance |
| Timeline |
| Adventure Box Technology |
| Firefly AB |
Adventure Box and Firefly AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Adventure Box and Firefly AB
The main advantage of trading using opposite Adventure Box and Firefly AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Adventure Box position performs unexpectedly, Firefly AB 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 Firefly AB will offset losses from the drop in Firefly AB's long position.| Adventure Box vs. Flexion Mobile PLC | Adventure Box vs. Stillfront Group AB | Adventure Box vs. iZafe Group AB |
| Firefly AB vs. Isofol Medical AB | Firefly AB vs. Redsense Medical AB | Firefly AB vs. Kinnevik Investment AB | Firefly AB vs. Spago Nanomedical AB |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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