Correlation Between Systemair and Lowland Investment
Can any of the company-specific risk be diversified away by investing in both Systemair and Lowland Investment 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 Lowland Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Systemair AB and Lowland Investment Co, you can compare the effects of market volatilities on Systemair and Lowland Investment 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 Lowland Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Systemair and Lowland Investment.
Diversification Opportunities for Systemair and Lowland Investment
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Systemair and Lowland is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Systemair AB and Lowland Investment Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lowland Investment 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 Lowland Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lowland Investment has no effect on the direction of Systemair i.e., Systemair and Lowland Investment go up and down completely randomly.
Pair Corralation between Systemair and Lowland Investment
Assuming the 90 days trading horizon Systemair AB is expected to generate 2.19 times more return on investment than Lowland Investment. However, Systemair is 2.19 times more volatile than Lowland Investment Co. It trades about 0.04 of its potential returns per unit of risk. Lowland Investment Co is currently generating about 0.04 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 Together |
| Strength | Insignificant |
| Accuracy | 99.44% |
| Values | Daily Returns |
Systemair AB vs. Lowland Investment Co
Performance |
| Timeline |
| Systemair AB |
| Lowland Investment |
Systemair and Lowland Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Systemair and Lowland Investment
The main advantage of trading using opposite Systemair and Lowland Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Systemair position performs unexpectedly, Lowland Investment 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 Lowland Investment will offset losses from the drop in Lowland Investment's long position.| Systemair vs. Cornish Metals | Systemair vs. Federal Realty Investment | Systemair vs. Bankers Investment Trust | Systemair vs. The Mercantile Investment |
| Lowland Investment vs. Systemair AB | Lowland Investment vs. Bell Food Group | Lowland Investment vs. Finnair Oyj | Lowland Investment vs. Sligro Food 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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