Correlation Between Systemair and GlobalData PLC
Can any of the company-specific risk be diversified away by investing in both Systemair and GlobalData 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 GlobalData 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 GlobalData PLC, you can compare the effects of market volatilities on Systemair and GlobalData 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 GlobalData PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Systemair and GlobalData PLC.
Diversification Opportunities for Systemair and GlobalData PLC
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Systemair and GlobalData is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Systemair AB and GlobalData PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GlobalData 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 GlobalData PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GlobalData PLC has no effect on the direction of Systemair i.e., Systemair and GlobalData PLC go up and down completely randomly.
Pair Corralation between Systemair and GlobalData PLC
Assuming the 90 days trading horizon Systemair AB is expected to under-perform the GlobalData PLC. In addition to that, Systemair is 1.25 times more volatile than GlobalData PLC. It trades about -0.15 of its total potential returns per unit of risk. GlobalData PLC is currently generating about 0.0 per unit of volatility. If you would invest 18,700 in GlobalData PLC on October 22, 2024 and sell it today you would lose (100.00) from holding GlobalData PLC or give up 0.53% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 94.74% |
| Values | Daily Returns |
Systemair AB vs. GlobalData PLC
Performance |
| Timeline |
| Systemair AB |
| GlobalData PLC |
Systemair and GlobalData PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Systemair and GlobalData PLC
The main advantage of trading using opposite Systemair and GlobalData PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Systemair position performs unexpectedly, GlobalData 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 GlobalData PLC will offset losses from the drop in GlobalData PLC's long position.| Systemair vs. Bellevue Healthcare Trust | Systemair vs. Creo Medical Group | Systemair vs. Cardinal Health | Systemair vs. Empire Metals Limited |
| GlobalData PLC vs. Systemair AB | GlobalData PLC vs. BE Semiconductor Industries | GlobalData PLC vs. Clean Power Hydrogen | GlobalData PLC vs. Fidelity National Information |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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