Correlation Between Online Brands and Mavshack Publ

Can any of the company-specific risk be diversified away by investing in both Online Brands and Mavshack Publ 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 Mavshack Publ 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 Mavshack publ AB, you can compare the effects of market volatilities on Online Brands and Mavshack Publ 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 Mavshack Publ. Check out your portfolio center. Please also check ongoing floating volatility patterns of Online Brands and Mavshack Publ.

Diversification Opportunities for Online Brands and Mavshack Publ

0.16

Correlation Coefficient

Online Brands  Mavshack Publ

Average diversification

The 3 months correlation between Online and Mavshack is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Online Brands Nordic and Mavshack publ AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mavshack publ 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 Mavshack Publ. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mavshack publ AB has no effect on the direction of Online Brands i.e., Online Brands and Mavshack Publ go up and down completely randomly.

Pair Corralation between Online Brands and Mavshack Publ

Assuming the 90 days trading horizon Online Brands Nordic is expected to generate 0.64 times more return on investment than Mavshack Publ. However, Online Brands Nordic is 1.57 times less risky than Mavshack Publ. It trades about 0.13 of its potential returns per unit of risk. Mavshack publ AB is currently generating about -0.25 per unit of risk. If you would invest  996.00  in Online Brands Nordic on September 12, 2024 and sell it today you would earn a total of  384.00  from holding Online Brands Nordic or generate 38.55% return on investment over 90 days.

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

Online Brands Nordic  vs.  Mavshack publ AB

Online Brands Nordic

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Online Brands Nordic are ranked lower than 10 (%) 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.

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 weak 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.

Pair Trading with Online Brands and Mavshack Publ

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

The idea behind Online Brands Nordic and Mavshack publ 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.