Correlation Between Firefly AB and ScandBook Holding
Can any of the company-specific risk be diversified away by investing in both Firefly AB and ScandBook Holding 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 ScandBook Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Firefly AB and ScandBook Holding AB, you can compare the effects of market volatilities on Firefly AB and ScandBook Holding 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 ScandBook Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Firefly AB and ScandBook Holding.
Diversification Opportunities for Firefly AB and ScandBook Holding
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Firefly and ScandBook is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Firefly AB and ScandBook Holding AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ScandBook Holding 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 ScandBook Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ScandBook Holding has no effect on the direction of Firefly AB i.e., Firefly AB and ScandBook Holding go up and down completely randomly.
Pair Corralation between Firefly AB and ScandBook Holding
Assuming the 90 days trading horizon Firefly AB is expected to generate 1.11 times more return on investment than ScandBook Holding. However, Firefly AB is 1.11 times more volatile than ScandBook Holding AB. It trades about 0.09 of its potential returns per unit of risk. ScandBook Holding AB is currently generating about 0.02 per unit of risk. If you would invest 7,625 in Firefly AB on August 30, 2024 and sell it today you would earn a total of 11,975 from holding Firefly AB or generate 157.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Firefly AB vs. ScandBook Holding AB
Performance |
| Timeline |
| Firefly AB |
| ScandBook Holding |
Firefly AB and ScandBook Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Firefly AB and ScandBook Holding
The main advantage of trading using opposite Firefly AB and ScandBook Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Firefly AB position performs unexpectedly, ScandBook Holding 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 ScandBook Holding will offset losses from the drop in ScandBook Holding's long position.| Firefly AB vs. Fractal Gaming Group | Firefly AB vs. Flexion Mobile PLC | Firefly AB vs. Filo Mining Corp | Firefly AB vs. Beowulf Mining PLC |
| ScandBook Holding vs. Zinzino AB Series | ScandBook Holding vs. Firefly AB | ScandBook Holding vs. Generic Sweden publ | ScandBook Holding vs. Nepa 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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