Correlation Between Firefly AB and Sprint Bioscience
Can any of the company-specific risk be diversified away by investing in both Firefly AB and Sprint Bioscience 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 Sprint Bioscience into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Firefly AB and Sprint Bioscience AB, you can compare the effects of market volatilities on Firefly AB and Sprint Bioscience 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 Sprint Bioscience. Check out your portfolio center. Please also check ongoing floating volatility patterns of Firefly AB and Sprint Bioscience.
Diversification Opportunities for Firefly AB and Sprint Bioscience
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Firefly and Sprint is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Firefly AB and Sprint Bioscience AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sprint Bioscience 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 Sprint Bioscience. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sprint Bioscience has no effect on the direction of Firefly AB i.e., Firefly AB and Sprint Bioscience go up and down completely randomly.
Pair Corralation between Firefly AB and Sprint Bioscience
Assuming the 90 days trading horizon Firefly AB is expected to generate 0.55 times more return on investment than Sprint Bioscience. However, Firefly AB is 1.83 times less risky than Sprint Bioscience. It trades about -0.12 of its potential returns per unit of risk. Sprint Bioscience AB is currently generating about -0.08 per unit of risk. If you would invest 21,600 in Firefly AB on September 4, 2024 and sell it today you would lose (1,750) from holding Firefly AB or give up 8.1% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Firefly AB vs. Sprint Bioscience AB
Performance |
| Timeline |
| Firefly AB |
| Sprint Bioscience |
Firefly AB and Sprint Bioscience Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Firefly AB and Sprint Bioscience
The main advantage of trading using opposite Firefly AB and Sprint Bioscience positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Firefly AB position performs unexpectedly, Sprint Bioscience 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 Sprint Bioscience will offset losses from the drop in Sprint Bioscience's long position.| Firefly AB vs. Sprint Bioscience AB | Firefly AB vs. Acarix AS | Firefly AB vs. Annexin Pharmaceuticals AB | Firefly AB vs. KABE Group AB |
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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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