Correlation Between Systemair and Amaroq Minerals
Can any of the company-specific risk be diversified away by investing in both Systemair and Amaroq Minerals 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 Amaroq Minerals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Systemair AB and Amaroq Minerals, you can compare the effects of market volatilities on Systemair and Amaroq Minerals 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 Amaroq Minerals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Systemair and Amaroq Minerals.
Diversification Opportunities for Systemair and Amaroq Minerals
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Systemair and Amaroq is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Systemair AB and Amaroq Minerals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amaroq Minerals 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 Amaroq Minerals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amaroq Minerals has no effect on the direction of Systemair i.e., Systemair and Amaroq Minerals go up and down completely randomly.
Pair Corralation between Systemair and Amaroq Minerals
Assuming the 90 days trading horizon Systemair is expected to generate 3.13 times less return on investment than Amaroq Minerals. But when comparing it to its historical volatility, Systemair AB is 2.4 times less risky than Amaroq Minerals. It trades about 0.18 of its potential returns per unit of risk. Amaroq Minerals is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 7,980 in Amaroq Minerals on August 29, 2024 and sell it today you would earn a total of 2,235 from holding Amaroq Minerals or generate 28.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Systemair AB vs. Amaroq Minerals
Performance |
| Timeline |
| Systemair AB |
| Amaroq Minerals |
Systemair and Amaroq Minerals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Systemair and Amaroq Minerals
The main advantage of trading using opposite Systemair and Amaroq Minerals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Systemair position performs unexpectedly, Amaroq Minerals 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 Amaroq Minerals will offset losses from the drop in Amaroq Minerals' long position.| Systemair vs. Cornish Metals | Systemair vs. GoldMining | Systemair vs. GreenX Metals | Systemair vs. Leroy Seafood Group |
| Amaroq Minerals vs. Zinc Media Group | Amaroq Minerals vs. LBG Media PLC | Amaroq Minerals vs. Systemair AB | Amaroq Minerals vs. Air Products Chemicals |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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