Correlation Between Mavshack Publ and Online Brands

Can any of the company-specific risk be diversified away by investing in both Mavshack Publ and Online Brands 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 Mavshack Publ and Online Brands into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Mavshack publ AB and Online Brands Nordic, you can compare the effects of market volatilities on Mavshack Publ and Online Brands 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 Mavshack Publ with a short position of Online Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mavshack Publ and Online Brands.

Diversification Opportunities for Mavshack Publ and Online Brands

0.09

Correlation Coefficient

Mavshack Publ  Online Brands

Significant diversification

The 3 months correlation between Mavshack and Online is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Mavshack publ AB and Online Brands Nordic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Online Brands Nordic and Mavshack Publ 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 Mavshack publ AB are associated (or correlated) with Online Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Online Brands Nordic has no effect on the direction of Mavshack Publ i.e., Mavshack Publ and Online Brands go up and down completely randomly.

Pair Corralation between Mavshack Publ and Online Brands

Assuming the 90 days trading horizon Mavshack publ AB is expected to under-perform the Online Brands. In addition to that, Mavshack Publ is 1.71 times more volatile than Online Brands Nordic. It trades about -0.19 of its total potential returns per unit of risk. Online Brands Nordic is currently generating about 0.06 per unit of volatility. If you would invest  1,000.00  in Online Brands Nordic on September 5, 2024 and sell it today you would earn a total of  130.00  from holding Online Brands Nordic or generate 13.0% return on investment over 90 days.

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

Mavshack publ AB  vs.  Online Brands Nordic

Mavshack publ AB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mavshack publ AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Online Brands Nordic

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Online Brands Nordic are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Online Brands unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Mavshack Publ and Online Brands

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

The idea behind Mavshack publ AB and Online Brands Nordic 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.