Correlation Between Systemair and Avis Budget
Can any of the company-specific risk be diversified away by investing in both Systemair and Avis Budget 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 Systemair and Avis Budget into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Systemair AB and Avis Budget Group, you can compare the effects of market volatilities on Systemair and Avis Budget 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 Systemair with a short position of Avis Budget. Check out your portfolio center. Please also check ongoing floating volatility patterns of Systemair and Avis Budget.
Diversification Opportunities for Systemair and Avis Budget
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Systemair and Avis is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Systemair AB and Avis Budget Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Avis Budget Group and Systemair 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 Systemair AB are associated (or correlated) with Avis Budget. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Avis Budget Group has no effect on the direction of Systemair i.e., Systemair and Avis Budget go up and down completely randomly.
Pair Corralation between Systemair and Avis Budget
Assuming the 90 days trading horizon Systemair AB is expected to generate 1.07 times more return on investment than Avis Budget. However, Systemair is 1.07 times more volatile than Avis Budget Group. It trades about 0.16 of its potential returns per unit of risk. Avis Budget Group is currently generating about -0.11 per unit of risk. If you would invest 8,820 in Systemair AB on September 16, 2024 and sell it today you would earn a total of 790.00 from holding Systemair AB or generate 8.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Systemair AB vs. Avis Budget Group
Performance |
| Timeline |
| Systemair AB |
| Avis Budget Group |
Systemair and Avis Budget Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Systemair and Avis Budget
The main advantage of trading using opposite Systemair and Avis Budget positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Systemair position performs unexpectedly, Avis Budget 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 Avis Budget will offset losses from the drop in Avis Budget's long position.| Systemair vs. Samsung Electronics Co | Systemair vs. Samsung Electronics Co | Systemair vs. Hyundai Motor | Systemair vs. Reliance Industries Ltd |
| Avis Budget vs. Flow Traders NV | Avis Budget vs. Austevoll Seafood ASA | Avis Budget vs. Automatic Data Processing | Avis Budget vs. Grieg Seafood |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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