Correlation Between Storytel and Starbreeze

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

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

Diversification Opportunities for Storytel and Starbreeze

-0.3

Correlation Coefficient

Storytel  Starbreeze

Very good diversification

The 3 months correlation between Storytel and Starbreeze is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Storytel AB and Starbreeze AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Starbreeze AB and Storytel 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 Storytel AB are associated (or correlated) with Starbreeze. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Starbreeze AB has no effect on the direction of Storytel i.e., Storytel and Starbreeze go up and down completely randomly.

Pair Corralation between Storytel and Starbreeze

Assuming the 90 days trading horizon Storytel AB is expected to generate 0.5 times more return on investment than Starbreeze. However, Storytel AB is 2.01 times less risky than Starbreeze. It trades about 0.03 of its potential returns per unit of risk. Starbreeze AB is currently generating about -0.03 per unit of risk. If you would invest  5,620  in Storytel AB on October 12, 2024 and sell it today you would earn a total of  935.00  from holding Storytel AB or generate 16.64% return on investment over 90 days.

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

Storytel AB  vs.  Starbreeze AB

Storytel AB

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Storytel AB are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, Storytel may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Starbreeze AB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Starbreeze AB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Storytel and Starbreeze

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

The idea behind Storytel AB and Starbreeze 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.

Check out your portfolio center.

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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.