Correlation Between Stillfront Group and Evolution
Can any of the company-specific risk be diversified away by investing in both Stillfront Group and Evolution 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 Stillfront Group and Evolution into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stillfront Group AB and Evolution AB, you can compare the effects of market volatilities on Stillfront Group and Evolution 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 Stillfront Group with a short position of Evolution. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stillfront Group and Evolution.
Diversification Opportunities for Stillfront Group and Evolution
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Stillfront and Evolution is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Stillfront Group AB and Evolution AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evolution AB and Stillfront Group 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 Stillfront Group AB are associated (or correlated) with Evolution. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Evolution AB has no effect on the direction of Stillfront Group i.e., Stillfront Group and Evolution go up and down completely randomly.
Pair Corralation between Stillfront Group and Evolution
Assuming the 90 days horizon Stillfront Group AB is expected to generate 1.54 times more return on investment than Evolution. However, Stillfront Group is 1.54 times more volatile than Evolution AB. It trades about 0.02 of its potential returns per unit of risk. Evolution AB is currently generating about -0.06 per unit of risk. If you would invest 721.00 in Stillfront Group AB on September 2, 2024 and sell it today you would earn a total of 13.00 from holding Stillfront Group AB or generate 1.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stillfront Group AB vs. Evolution AB
Performance |
| Timeline |
| Stillfront Group |
| Evolution AB |
Stillfront Group and Evolution Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stillfront Group and Evolution
The main advantage of trading using opposite Stillfront Group and Evolution positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stillfront Group position performs unexpectedly, Evolution 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 Evolution will offset losses from the drop in Evolution's long position.| Stillfront Group vs. MilDef Group AB | Stillfront Group vs. Fractal Gaming Group | Stillfront Group vs. KABE Group AB | Stillfront Group vs. IAR Systems 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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