Correlation Between Stillfront Group and Storytel

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

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

Diversification Opportunities for Stillfront Group and Storytel

-0.2

Correlation Coefficient

Stillfront Group  Storytel

Good diversification

The 3 months correlation between Stillfront and Storytel is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Stillfront Group AB and Storytel AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Storytel AB and Stillfront 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 Stillfront Group 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 Stillfront Group i.e., Stillfront Group and Storytel go up and down completely randomly.

Pair Corralation between Stillfront Group and Storytel

Assuming the 90 days horizon Stillfront Group is expected to generate 3.46 times less return on investment than Storytel. In addition to that, Stillfront Group is 1.44 times more volatile than Storytel AB. It trades about 0.03 of its total potential returns per unit of risk. Storytel AB is currently generating about 0.16 per unit of volatility. If you would invest  4,784  in Storytel AB on September 3, 2024 and sell it today you would earn a total of  1,266  from holding Storytel AB or generate 26.46% return on investment over 90 days.

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

Stillfront Group AB  vs.  Storytel AB

Stillfront Group

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Stillfront Group AB are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Stillfront Group may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Storytel AB

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Storytel AB are ranked lower than 12 (%) 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 Stillfront Group and Storytel

The main advantage of trading using opposite Stillfront Group and Storytel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stillfront 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 Stillfront Group 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.