Correlation Between Modern Times and Starbreeze
Can any of the company-specific risk be diversified away by investing in both Modern Times 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 Modern Times and Starbreeze into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Modern Times Group and Starbreeze AB, you can compare the effects of market volatilities on Modern Times 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 Modern Times with a short position of Starbreeze. Check out your portfolio center. Please also check ongoing floating volatility patterns of Modern Times and Starbreeze.
Diversification Opportunities for Modern Times and Starbreeze
-0.84 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Modern and Starbreeze is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Modern Times Group and Starbreeze AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Starbreeze AB and Modern Times 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 Modern Times 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 Modern Times i.e., Modern Times and Starbreeze go up and down completely randomly.
Pair Corralation between Modern Times and Starbreeze
Assuming the 90 days trading horizon Modern Times Group is expected to generate 0.25 times more return on investment than Starbreeze. However, Modern Times Group is 4.02 times less risky than Starbreeze. It trades about 0.05 of its potential returns per unit of risk. Starbreeze AB is currently generating about -0.02 per unit of risk. If you would invest 8,500 in Modern Times Group on September 24, 2024 and sell it today you would earn a total of 950.00 from holding Modern Times Group or generate 11.18% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Modern Times Group vs. Starbreeze AB
Performance |
Timeline |
Modern Times Group |
Starbreeze AB |
Modern Times and Starbreeze Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Modern Times and Starbreeze
The main advantage of trading using opposite Modern Times and Starbreeze positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Modern Times 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.Modern Times vs. Modern Times Group | Modern Times vs. Kinnevik Investment AB | Modern Times vs. Tele2 AB | Modern Times vs. Holmen AB |
Starbreeze vs. Samhllsbyggnadsbolaget i Norden | Starbreeze vs. Sinch AB | Starbreeze vs. Zaptec AS | Starbreeze vs. Evolution AB |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
Other Complementary Tools
Transaction History View history of all your transactions and understand their impact on performance | |
Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk |