Correlation Between Systemair and Centamin PLC
Can any of the company-specific risk be diversified away by investing in both Systemair and Centamin PLC 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 Centamin PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Systemair AB and Centamin PLC, you can compare the effects of market volatilities on Systemair and Centamin PLC 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 Centamin PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Systemair and Centamin PLC.
Diversification Opportunities for Systemair and Centamin PLC
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Systemair and Centamin is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Systemair AB and Centamin PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Centamin PLC 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 Centamin PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Centamin PLC has no effect on the direction of Systemair i.e., Systemair and Centamin PLC go up and down completely randomly.
Pair Corralation between Systemair and Centamin PLC
Assuming the 90 days trading horizon Systemair AB is expected to generate 0.87 times more return on investment than Centamin PLC. However, Systemair AB is 1.15 times less risky than Centamin PLC. It trades about 0.28 of its potential returns per unit of risk. Centamin PLC is currently generating about -0.19 per unit of risk. If you would invest 8,180 in Systemair AB on September 1, 2024 and sell it today you would earn a total of 1,030 from holding Systemair AB or generate 12.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 81.82% |
| Values | Daily Returns |
Systemair AB vs. Centamin PLC
Performance |
| Timeline |
| Systemair AB |
| Centamin PLC |
Systemair and Centamin PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Systemair and Centamin PLC
The main advantage of trading using opposite Systemair and Centamin PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Systemair position performs unexpectedly, Centamin PLC 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 Centamin PLC will offset losses from the drop in Centamin PLC's long position.| Systemair vs. Aeorema Communications Plc | Systemair vs. Federal Realty Investment | Systemair vs. Gamma Communications PLC | Systemair vs. Kinnevik Investment AB |
| Centamin PLC vs. Pentair PLC | Centamin PLC vs. Nordic Semiconductor ASA | Centamin PLC vs. Systemair AB | Centamin PLC vs. Gaming Realms plc |
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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