Correlation Between Kambi Group and Storytel

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

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

Diversification Opportunities for Kambi Group and Storytel

-0.18

Correlation Coefficient

Kambi Group  Storytel

Good diversification

The 3 months correlation between Kambi and Storytel is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Kambi Group PLC and Storytel AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Storytel AB and Kambi 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 Kambi Group PLC 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 Kambi Group i.e., Kambi Group and Storytel go up and down completely randomly.

Pair Corralation between Kambi Group and Storytel

Assuming the 90 days trading horizon Kambi Group PLC is expected to under-perform the Storytel. In addition to that, Kambi Group is 1.67 times more volatile than Storytel AB. It trades about -0.37 of its total potential returns per unit of risk. Storytel AB is currently generating about -0.22 per unit of volatility. If you would invest  6,655  in Storytel AB on September 1, 2024 and sell it today you would lose (605.00) from holding Storytel AB or give up 9.09% of portfolio value over 90 days.

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

Kambi Group PLC  vs.  Storytel AB

Kambi Group PLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kambi Group PLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Storytel AB

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Storytel AB are ranked lower than 10 (%) 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 Kambi Group and Storytel

The main advantage of trading using opposite Kambi Group and Storytel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kambi Group 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 Kambi Group PLC 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.