Correlation Between Boozt AB and Stillfront Group

Can any of the company-specific risk be diversified away by investing in both Boozt AB and Stillfront Group 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 Boozt AB and Stillfront Group into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Boozt AB and Stillfront Group AB, you can compare the effects of market volatilities on Boozt AB and Stillfront Group 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 Boozt AB with a short position of Stillfront Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boozt AB and Stillfront Group.

Diversification Opportunities for Boozt AB and Stillfront Group

0.61

Correlation Coefficient

Boozt AB  Stillfront Group

Poor diversification

The 3 months correlation between Boozt and Stillfront is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Boozt AB and Stillfront Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stillfront Group and Boozt 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 Boozt AB are associated (or correlated) with Stillfront Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stillfront Group has no effect on the direction of Boozt AB i.e., Boozt AB and Stillfront Group go up and down completely randomly.

Pair Corralation between Boozt AB and Stillfront Group

Assuming the 90 days trading horizon Boozt AB is expected to generate 2.25 times less return on investment than Stillfront Group. But when comparing it to its historical volatility, Boozt AB is 1.22 times less risky than Stillfront Group. It trades about 0.08 of its potential returns per unit of risk. Stillfront Group AB is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  661.00  in Stillfront Group AB on October 7, 2024 and sell it today you would earn a total of  210.00  from holding Stillfront Group AB or generate 31.77% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Boozt AB  vs.  Stillfront Group AB

Boozt AB

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Boozt AB are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Boozt AB unveiled solid returns over the last few months and may actually be approaching a breakup point.

Stillfront Group

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Stillfront Group AB are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Stillfront Group unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Boozt AB and Stillfront Group

The main advantage of trading using opposite Boozt AB and Stillfront Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boozt AB position performs unexpectedly, Stillfront Group 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 Stillfront Group will offset losses from the drop in Stillfront Group's long position.

The idea behind Boozt AB and Stillfront Group AB pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.