Correlation Between Firefly AB and Investment
Can any of the company-specific risk be diversified away by investing in both Firefly AB and Investment 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 Firefly AB and Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Firefly AB and Investment AB Oresund, you can compare the effects of market volatilities on Firefly AB and Investment 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 Firefly AB with a short position of Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Firefly AB and Investment.
Diversification Opportunities for Firefly AB and Investment
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Firefly and Investment is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Firefly AB and Investment AB Oresund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Investment AB Oresund and Firefly AB 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 Firefly AB are associated (or correlated) with Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Investment AB Oresund has no effect on the direction of Firefly AB i.e., Firefly AB and Investment go up and down completely randomly.
Pair Corralation between Firefly AB and Investment
Assuming the 90 days trading horizon Firefly AB is expected to under-perform the Investment. In addition to that, Firefly AB is 1.44 times more volatile than Investment AB Oresund. It trades about 0.0 of its total potential returns per unit of risk. Investment AB Oresund is currently generating about 0.1 per unit of volatility. If you would invest 10,820 in Investment AB Oresund on October 25, 2024 and sell it today you would earn a total of 280.00 from holding Investment AB Oresund or generate 2.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Firefly AB vs. Investment AB Oresund
Performance |
| Timeline |
| Firefly AB |
| Investment AB Oresund |
Firefly AB and Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Firefly AB and Investment
The main advantage of trading using opposite Firefly AB and Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Firefly AB position performs unexpectedly, Investment 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 Investment will offset losses from the drop in Investment's long position.| Firefly AB vs. Isofol Medical AB | Firefly AB vs. Redsense Medical AB | Firefly AB vs. Kinnevik Investment AB | Firefly AB vs. Spago Nanomedical AB |
| Investment vs. Bure Equity AB | Investment vs. Creades AB | Investment vs. L E Lundbergfretagen | Investment vs. Industrivarden AB ser |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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