Correlation Between Implantica and Storytel

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

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

Diversification Opportunities for Implantica and Storytel

-0.53

Correlation Coefficient

Implantica  Storytel

Excellent diversification

The 3 months correlation between Implantica and Storytel is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Implantica AG and Storytel AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Storytel AB and Implantica 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 Implantica AG are associated (or correlated) with Storytel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Storytel AB has no effect on the direction of Implantica i.e., Implantica and Storytel go up and down completely randomly.

Pair Corralation between Implantica and Storytel

Assuming the 90 days trading horizon Implantica AG is expected to under-perform the Storytel. In addition to that, Implantica is 1.17 times more volatile than Storytel AB. It trades about -0.11 of its total potential returns per unit of risk. Storytel AB is currently generating about 0.23 per unit of volatility. If you would invest  6,125  in Storytel AB on September 26, 2024 and sell it today you would earn a total of  695.00  from holding Storytel AB or generate 11.35% return on investment over 90 days.

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

Implantica AG  vs.  Storytel AB

Implantica AG

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Implantica AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Storytel AB

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Storytel AB are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Storytel sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Implantica and Storytel

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

The idea behind Implantica AG and Storytel 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.