Correlation Between Firefly AB and Kopy Goldfields

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

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

Diversification Opportunities for Firefly AB and Kopy Goldfields

-0.51

Correlation Coefficient

Firefly AB  Kopy Goldfields

Excellent diversification

The 3 months correlation between Firefly and Kopy is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Firefly AB and Kopy Goldfields publ in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kopy Goldfields publ and Firefly AB 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 Firefly AB are associated (or correlated) with Kopy Goldfields. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kopy Goldfields publ has no effect on the direction of Firefly AB i.e., Firefly AB and Kopy Goldfields go up and down completely randomly.

Pair Corralation between Firefly AB and Kopy Goldfields

If you would invest  18,650  in Firefly AB on February 2, 2024 and sell it today you would earn a total of  1,200  from holding Firefly AB or generate 6.43% return on investment over 90 days.

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

Firefly AB  vs.  Kopy Goldfields publ

Firefly AB

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Firefly AB are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Firefly AB may actually be approaching a critical reversion point that can send shares even higher in June 2024.

Kopy Goldfields publ

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kopy Goldfields publ has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in June 2024. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Firefly AB and Kopy Goldfields

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

The idea behind Firefly AB and Kopy Goldfields publ 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.