Correlation Between Zaptec AS and Stillfront Group

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

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

Diversification Opportunities for Zaptec AS and Stillfront Group

-0.38

Correlation Coefficient

Zaptec AS  Stillfront Group

Very good diversification

The 3 months correlation between Zaptec and Stillfront is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Zaptec AS and Stillfront Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stillfront Group and Zaptec AS 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 Zaptec AS are associated (or correlated) with Stillfront Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stillfront Group has no effect on the direction of Zaptec AS i.e., Zaptec AS and Stillfront Group go up and down completely randomly.

Pair Corralation between Zaptec AS and Stillfront Group

Assuming the 90 days trading horizon Zaptec AS is expected to under-perform the Stillfront Group. In addition to that, Zaptec AS is 1.09 times more volatile than Stillfront Group AB. It trades about -0.03 of its total potential returns per unit of risk. Stillfront Group AB is currently generating about -0.02 per unit of volatility. If you would invest  1,185  in Stillfront Group AB on October 5, 2024 and sell it today you would lose (310.00) from holding Stillfront Group AB or give up 26.16% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.62%
Values	Daily Returns

Zaptec AS  vs.  Stillfront Group AB

Zaptec AS

Risk-Adjusted Performance

0 of 100

Insignificant

Over the last 90 days Zaptec AS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite weak basic indicators, Zaptec AS may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Stillfront Group

Risk-Adjusted Performance

0 of 100

Good

Over the last 90 days Stillfront Group AB has generated negative risk-adjusted returns adding no value to investors with long positions. 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.

Pair Trading with Zaptec AS and Stillfront Group

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

The idea behind Zaptec AS and Stillfront Group 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.