Correlation Between Systemair and PPHE Hotel
Can any of the company-specific risk be diversified away by investing in both Systemair and PPHE Hotel 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 PPHE Hotel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Systemair AB and PPHE Hotel Group, you can compare the effects of market volatilities on Systemair and PPHE Hotel 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 PPHE Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Systemair and PPHE Hotel.
Diversification Opportunities for Systemair and PPHE Hotel
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Systemair and PPHE is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Systemair AB and PPHE Hotel Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PPHE Hotel Group 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 PPHE Hotel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PPHE Hotel Group has no effect on the direction of Systemair i.e., Systemair and PPHE Hotel go up and down completely randomly.
Pair Corralation between Systemair and PPHE Hotel
Assuming the 90 days trading horizon Systemair AB is expected to generate 1.26 times more return on investment than PPHE Hotel. However, Systemair is 1.26 times more volatile than PPHE Hotel Group. It trades about 0.04 of its potential returns per unit of risk. PPHE Hotel Group is currently generating about 0.01 per unit of risk. If you would invest 6,859 in Systemair AB on September 2, 2024 and sell it today you would earn a total of 2,351 from holding Systemair AB or generate 34.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.01% |
| Values | Daily Returns |
Systemair AB vs. PPHE Hotel Group
Performance |
| Timeline |
| Systemair AB |
| PPHE Hotel Group |
Systemair and PPHE Hotel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Systemair and PPHE Hotel
The main advantage of trading using opposite Systemair and PPHE Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Systemair position performs unexpectedly, PPHE Hotel 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 PPHE Hotel will offset losses from the drop in PPHE Hotel's long position.| Systemair vs. Tyson Foods Cl | Systemair vs. Bell Food Group | Systemair vs. Tata Steel Limited | Systemair vs. JLEN Environmental Assets |
| PPHE Hotel vs. Ecclesiastical Insurance Office | PPHE Hotel vs. Norman Broadbent Plc | PPHE Hotel vs. Broadcom | PPHE Hotel vs. Systemair AB |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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