Correlation Between Systemair and Givaudan
Can any of the company-specific risk be diversified away by investing in both Systemair and Givaudan 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 Givaudan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Systemair AB and Givaudan SA, you can compare the effects of market volatilities on Systemair and Givaudan 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 Givaudan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Systemair and Givaudan.
Diversification Opportunities for Systemair and Givaudan
Very good diversification
The 3 months correlation between Systemair and Givaudan is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Systemair AB and Givaudan SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Givaudan SA 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 Givaudan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Givaudan SA has no effect on the direction of Systemair i.e., Systemair and Givaudan go up and down completely randomly.
Pair Corralation between Systemair and Givaudan
Assuming the 90 days trading horizon Systemair AB is expected to generate 1.79 times more return on investment than Givaudan. However, Systemair is 1.79 times more volatile than Givaudan SA. It trades about 0.04 of its potential returns per unit of risk. Givaudan SA is currently generating about 0.07 per unit of risk. If you would invest 7,246 in Systemair AB on September 12, 2024 and sell it today you would earn a total of 2,214 from holding Systemair AB or generate 30.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.88% |
| Values | Daily Returns |
Systemair AB vs. Givaudan SA
Performance |
| Timeline |
| Systemair AB |
| Givaudan SA |
Systemair and Givaudan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Systemair and Givaudan
The main advantage of trading using opposite Systemair and Givaudan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Systemair position performs unexpectedly, Givaudan 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 Givaudan will offset losses from the drop in Givaudan's long position.| Systemair vs. Cornish Metals | Systemair vs. Federal Realty Investment | Systemair vs. Bankers Investment Trust | Systemair vs. The Mercantile Investment |
| Givaudan vs. Systemair AB | Givaudan vs. Host Hotels Resorts | Givaudan vs. Park Hotels Resorts | Givaudan vs. InterContinental Hotels Group |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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