Correlation Between Stillfront Group and Nitro Games

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

Diversification Opportunities for Stillfront Group and Nitro Games

0.5

Correlation Coefficient

Stillfront Group  Nitro Games

Very weak diversification

The 3 months correlation between Stillfront and Nitro is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Stillfront Group AB and Nitro Games Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nitro Games Oyj 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 Nitro Games. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nitro Games Oyj has no effect on the direction of Stillfront Group i.e., Stillfront Group and Nitro Games go up and down completely randomly.

Pair Corralation between Stillfront Group and Nitro Games

Assuming the 90 days horizon Stillfront Group is expected to generate 1.53 times less return on investment than Nitro Games. In addition to that, Stillfront Group is 1.07 times more volatile than Nitro Games Oyj. It trades about 0.07 of its total potential returns per unit of risk. Nitro Games Oyj is currently generating about 0.12 per unit of volatility. If you would invest  230.00  in Nitro Games Oyj on October 10, 2024 and sell it today you would earn a total of  12.00  from holding Nitro Games Oyj or generate 5.22% return on investment over 90 days.

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

Stillfront Group AB  vs.  Nitro Games Oyj

Stillfront Group

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Stillfront Group AB are ranked lower than 9 (%) 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.

Nitro Games Oyj

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Nitro Games Oyj are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Nitro Games unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Stillfront Group and Nitro Games

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

The idea behind Stillfront Group AB and Nitro Games Oyj 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.