Correlation Between Online Brands and Firefly AB
Can any of the company-specific risk be diversified away by investing in both Online Brands 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 Online Brands and Firefly AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Online Brands Nordic and Firefly AB, you can compare the effects of market volatilities on Online Brands 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 Online Brands with a short position of Firefly AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Online Brands and Firefly AB.
Diversification Opportunities for Online Brands and Firefly AB
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Online and Firefly is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Online Brands Nordic and Firefly AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Firefly AB and Online Brands 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 Online Brands Nordic 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 Online Brands i.e., Online Brands and Firefly AB go up and down completely randomly.
Pair Corralation between Online Brands and Firefly AB
Assuming the 90 days trading horizon Online Brands Nordic is expected to generate 1.15 times more return on investment than Firefly AB. However, Online Brands is 1.15 times more volatile than Firefly AB. It trades about 0.02 of its potential returns per unit of risk. Firefly AB is currently generating about -0.11 per unit of risk. If you would invest 1,080 in Online Brands Nordic on September 1, 2024 and sell it today you would earn a total of 5.00 from holding Online Brands Nordic or generate 0.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Online Brands Nordic vs. Firefly AB
Performance |
| Timeline |
| Online Brands Nordic |
| Firefly AB |
Online Brands and Firefly AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Online Brands and Firefly AB
The main advantage of trading using opposite Online Brands and Firefly AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Online Brands 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.| Online Brands vs. NetJobs Group AB | Online Brands vs. Mantex AB | Online Brands vs. Doxa AB | Online Brands vs. Clean Motion AB |
| Firefly AB vs. SaltX Technology Holding | Firefly AB vs. Bio Works Technologies AB | Firefly AB vs. Online Brands Nordic | Firefly AB vs. Vitec Software Group |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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