Correlation Between Frontier Group and Bolt Projects

Can any of the company-specific risk be diversified away by investing in both Frontier Group and Bolt Projects 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 Frontier Group and Bolt Projects into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Frontier Group Holdings and Bolt Projects Holdings,, you can compare the effects of market volatilities on Frontier Group and Bolt Projects 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 Frontier Group with a short position of Bolt Projects. Check out your portfolio center. Please also check ongoing floating volatility patterns of Frontier Group and Bolt Projects.

Diversification Opportunities for Frontier Group and Bolt Projects

0.2

Correlation Coefficient

Frontier Group  Bolt Projects

Modest diversification

The 3 months correlation between Frontier and Bolt is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Frontier Group Holdings and Bolt Projects Holdings, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bolt Projects Holdings, and Frontier 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 Frontier Group Holdings are associated (or correlated) with Bolt Projects. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bolt Projects Holdings, has no effect on the direction of Frontier Group i.e., Frontier Group and Bolt Projects go up and down completely randomly.

Pair Corralation between Frontier Group and Bolt Projects

Given the investment horizon of 90 days Frontier Group is expected to generate 2.66 times less return on investment than Bolt Projects. But when comparing it to its historical volatility, Frontier Group Holdings is 4.56 times less risky than Bolt Projects. It trades about 0.31 of its potential returns per unit of risk. Bolt Projects Holdings, is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  4.00  in Bolt Projects Holdings, on October 23, 2024 and sell it today you would earn a total of  0.94  from holding Bolt Projects Holdings, or generate 23.5% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	66.67%
Values	Daily Returns

Frontier Group Holdings  vs.  Bolt Projects Holdings,

Frontier Group Holdings

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Frontier Group Holdings are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain fundamental indicators, Frontier Group exhibited solid returns over the last few months and may actually be approaching a breakup point.

Bolt Projects Holdings,

Risk-Adjusted Performance

0 of 100

Good

Over the last 90 days Bolt Projects Holdings, has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly inconsistent forward-looking signals, Bolt Projects showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Frontier Group and Bolt Projects

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

The idea behind Frontier Group Holdings and Bolt Projects Holdings, 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.