Correlation Between Stillfront Group and MIPS AB

Can any of the company-specific risk be diversified away by investing in both Stillfront Group and MIPS 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 Stillfront Group and MIPS AB 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 MIPS AB, you can compare the effects of market volatilities on Stillfront Group and MIPS 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 Stillfront Group with a short position of MIPS AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stillfront Group and MIPS AB.

Diversification Opportunities for Stillfront Group and MIPS AB

-0.26

Correlation Coefficient

Stillfront Group  MIPS AB

Very good diversification

The 3 months correlation between Stillfront and MIPS is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Stillfront Group AB and MIPS AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MIPS 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 MIPS AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MIPS AB has no effect on the direction of Stillfront Group i.e., Stillfront Group and MIPS AB go up and down completely randomly.

Pair Corralation between Stillfront Group and MIPS AB

Assuming the 90 days horizon Stillfront Group AB is expected to generate 1.41 times more return on investment than MIPS AB. However, Stillfront Group is 1.41 times more volatile than MIPS AB. It trades about 0.08 of its potential returns per unit of risk. MIPS AB is currently generating about -0.07 per unit of risk. If you would invest  682.00  in Stillfront Group AB on September 12, 2024 and sell it today you would earn a total of  99.00  from holding Stillfront Group AB or generate 14.52% return on investment over 90 days.

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

Stillfront Group AB  vs.  MIPS AB

Stillfront Group

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Stillfront Group AB are ranked lower than 6 (%) 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.

MIPS AB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MIPS AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain 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.

Pair Trading with Stillfront Group and MIPS AB

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

The idea behind Stillfront Group AB and MIPS 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.