Correlation Between Systemair and Edita Food
Can any of the company-specific risk be diversified away by investing in both Systemair and Edita Food 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 Edita Food into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Systemair AB and Edita Food Industries, you can compare the effects of market volatilities on Systemair and Edita Food 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 Edita Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Systemair and Edita Food.
Diversification Opportunities for Systemair and Edita Food
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Systemair and Edita is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Systemair AB and Edita Food Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Edita Food Industries 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 Edita Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Edita Food Industries has no effect on the direction of Systemair i.e., Systemair and Edita Food go up and down completely randomly.
Pair Corralation between Systemair and Edita Food
Assuming the 90 days trading horizon Systemair AB is expected to under-perform the Edita Food. In addition to that, Systemair is 5.48 times more volatile than Edita Food Industries. It trades about -0.04 of its total potential returns per unit of risk. Edita Food Industries is currently generating about 0.16 per unit of volatility. If you would invest 195.00 in Edita Food Industries on October 16, 2024 and sell it today you would earn a total of 5.00 from holding Edita Food Industries or generate 2.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Systemair AB vs. Edita Food Industries
Performance |
| Timeline |
| Systemair AB |
| Edita Food Industries |
Systemair and Edita Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Systemair and Edita Food
The main advantage of trading using opposite Systemair and Edita Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Systemair position performs unexpectedly, Edita Food 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 Edita Food will offset losses from the drop in Edita Food's long position.| Systemair vs. Capital Metals PLC | Systemair vs. Learning Technologies Group | Systemair vs. Coeur Mining | Systemair vs. CleanTech Lithium plc |
| Edita Food vs. Ebro Foods | Edita Food vs. Systemair AB | Edita Food vs. Molson Coors Beverage | Edita Food vs. Fevertree Drinks 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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