Correlation Between Instalco Intressenter and Storytel

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

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

Diversification Opportunities for Instalco Intressenter and Storytel

-0.72

Correlation Coefficient

Instalco Intressenter  Storytel

Pay attention - limited upside

The 3 months correlation between Instalco and Storytel is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Instalco Intressenter AB and Storytel AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Storytel AB and Instalco Intressenter 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 Instalco Intressenter AB 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 Instalco Intressenter i.e., Instalco Intressenter and Storytel go up and down completely randomly.

Pair Corralation between Instalco Intressenter and Storytel

Assuming the 90 days trading horizon Instalco Intressenter AB is expected to under-perform the Storytel. But the stock apears to be less risky and, when comparing its historical volatility, Instalco Intressenter AB is 1.04 times less risky than Storytel. The stock trades about -0.01 of its potential returns per unit of risk. The Storytel AB is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  4,630  in Storytel AB on October 2, 2024 and sell it today you would earn a total of  2,250  from holding Storytel AB or generate 48.6% return on investment over 90 days.

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

Instalco Intressenter AB  vs.  Storytel AB

Instalco Intressenter

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Instalco Intressenter AB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Storytel AB

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Storytel AB are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, Storytel sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Instalco Intressenter and Storytel

The main advantage of trading using opposite Instalco Intressenter and Storytel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Instalco Intressenter 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 Instalco Intressenter AB 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.