Correlation Between Steadfast Group and KOWORLD AG

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

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

Diversification Opportunities for Steadfast Group and KOWORLD AG

0.03

Correlation Coefficient

Steadfast Group  KOWORLD AG

Significant diversification

The 3 months correlation between Steadfast and KOWORLD is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Steadfast Group Limited and KOWORLD AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KOWORLD AG and Steadfast 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 Steadfast Group Limited are associated (or correlated) with KOWORLD AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KOWORLD AG has no effect on the direction of Steadfast Group i.e., Steadfast Group and KOWORLD AG go up and down completely randomly.

Pair Corralation between Steadfast Group and KOWORLD AG

Assuming the 90 days horizon Steadfast Group is expected to generate 3.79 times less return on investment than KOWORLD AG. But when comparing it to its historical volatility, Steadfast Group Limited is 1.38 times less risky than KOWORLD AG. It trades about 0.05 of its potential returns per unit of risk. KOWORLD AG is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  2,652  in KOWORLD AG on April 25, 2025 and sell it today you would earn a total of  438.00  from holding KOWORLD AG or generate 16.52% return on investment over 90 days.

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

Steadfast Group Limited  vs.  KOWORLD AG

Steadfast Group

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Steadfast Group Limited are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Steadfast Group is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

KOWORLD AG

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in KOWORLD AG are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, KOWORLD AG reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Steadfast Group and KOWORLD AG

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

The idea behind Steadfast Group Limited and KOWORLD AG 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.