Correlation Between Evolution and Stillfront Group
Can any of the company-specific risk be diversified away by investing in both Evolution and Stillfront 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 Evolution and Stillfront Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Evolution AB and Stillfront Group AB, you can compare the effects of market volatilities on Evolution and Stillfront 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 Evolution with a short position of Stillfront Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Evolution and Stillfront Group.
Diversification Opportunities for Evolution and Stillfront Group
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Evolution and Stillfront is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Evolution AB and Stillfront Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stillfront Group and Evolution 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 Evolution AB are associated (or correlated) with Stillfront Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stillfront Group has no effect on the direction of Evolution i.e., Evolution and Stillfront Group go up and down completely randomly.
Pair Corralation between Evolution and Stillfront Group
Assuming the 90 days trading horizon Evolution AB is expected to under-perform the Stillfront Group. But the stock apears to be less risky and, when comparing its historical volatility, Evolution AB is 2.7 times less risky than Stillfront Group. The stock trades about -0.23 of its potential returns per unit of risk. The Stillfront Group AB is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 736.00 in Stillfront Group AB on September 1, 2024 and sell it today you would lose (2.00) from holding Stillfront Group AB or give up 0.27% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Evolution AB vs. Stillfront Group AB
Performance |
| Timeline |
| Evolution AB |
| Stillfront Group |
Evolution and Stillfront Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Evolution and Stillfront Group
The main advantage of trading using opposite Evolution and Stillfront Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Evolution position performs unexpectedly, Stillfront 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 Stillfront Group will offset losses from the drop in Stillfront Group's long position.| Evolution vs. Embracer Group AB | Evolution vs. Sinch AB | Evolution vs. Kambi Group PLC | Evolution vs. Samhllsbyggnadsbolaget i Norden |
| Stillfront Group vs. Embracer Group AB | Stillfront Group vs. Sinch AB | Stillfront Group vs. Paradox Interactive AB | Stillfront Group vs. Evolution 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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