Correlation Between Unlimited Travel and Starbreeze

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

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

Diversification Opportunities for Unlimited Travel and Starbreeze

-0.39

Correlation Coefficient

Unlimited Travel  Starbreeze

Very good diversification

The 3 months correlation between Unlimited and Starbreeze is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Unlimited Travel Group and Starbreeze AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Starbreeze AB and Unlimited Travel 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 Unlimited Travel Group 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 Unlimited Travel i.e., Unlimited Travel and Starbreeze go up and down completely randomly.

Pair Corralation between Unlimited Travel and Starbreeze

Assuming the 90 days trading horizon Unlimited Travel Group is expected to generate 0.3 times more return on investment than Starbreeze. However, Unlimited Travel Group is 3.38 times less risky than Starbreeze. It trades about 0.02 of its potential returns per unit of risk. Starbreeze AB is currently generating about -0.02 per unit of risk. If you would invest  1,400  in Unlimited Travel Group on October 13, 2024 and sell it today you would earn a total of  50.00  from holding Unlimited Travel Group or generate 3.57% return on investment over 90 days.

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

Unlimited Travel Group  vs.  Starbreeze AB

Unlimited Travel

Risk-Adjusted Performance

7 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Unlimited Travel Group are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain technical and fundamental indicators, Unlimited Travel unveiled solid returns over the last few months and may actually be approaching a breakup point.

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 Unlimited Travel and Starbreeze

The main advantage of trading using opposite Unlimited Travel and Starbreeze positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Unlimited Travel 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 Unlimited Travel Group 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.

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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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.