Correlation Between Qleanair Holding and Firefly AB

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

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

Diversification Opportunities for Qleanair Holding and Firefly AB

0.52

Correlation Coefficient

Qleanair Holding  Firefly AB

Very weak diversification

The 3 months correlation between Qleanair and Firefly is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Qleanair Holding AB and Firefly AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Firefly AB and Qleanair Holding 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 Qleanair Holding AB 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 Qleanair Holding i.e., Qleanair Holding and Firefly AB go up and down completely randomly.

Pair Corralation between Qleanair Holding and Firefly AB

Assuming the 90 days trading horizon Qleanair Holding AB is expected to under-perform the Firefly AB. In addition to that, Qleanair Holding is 1.23 times more volatile than Firefly AB. It trades about -0.07 of its total potential returns per unit of risk. Firefly AB is currently generating about 0.03 per unit of volatility. If you would invest  17,900  in Firefly AB on December 23, 2024 and sell it today you would earn a total of  550.00  from holding Firefly AB or generate 3.07% return on investment over 90 days.

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

Qleanair Holding AB  vs.  Firefly AB

Qleanair Holding

Risk-Adjusted Performance

Very Weak

Over the last 90 days Qleanair Holding AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Firefly AB

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Firefly AB are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Firefly AB is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Qleanair Holding and Firefly AB

The main advantage of trading using opposite Qleanair Holding and Firefly AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Qleanair Holding 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.

The idea behind Qleanair Holding AB and Firefly 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.