Correlation Between Systemair and SANTANDER
Can any of the company-specific risk be diversified away by investing in both Systemair and SANTANDER 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 SANTANDER into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Systemair AB and SANTANDER UK 8, you can compare the effects of market volatilities on Systemair and SANTANDER 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 SANTANDER. Check out your portfolio center. Please also check ongoing floating volatility patterns of Systemair and SANTANDER.
Diversification Opportunities for Systemair and SANTANDER
Very good diversification
The 3 months correlation between Systemair and SANTANDER is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Systemair AB and SANTANDER UK 8 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SANTANDER UK 8 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 SANTANDER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SANTANDER UK 8 has no effect on the direction of Systemair i.e., Systemair and SANTANDER go up and down completely randomly.
Pair Corralation between Systemair and SANTANDER
Assuming the 90 days trading horizon Systemair AB is expected to generate 2.94 times more return on investment than SANTANDER. However, Systemair is 2.94 times more volatile than SANTANDER UK 8. It trades about 0.04 of its potential returns per unit of risk. SANTANDER UK 8 is currently generating about 0.07 per unit of risk. If you would invest 6,644 in Systemair AB on September 13, 2024 and sell it today you would earn a total of 3,096 from holding Systemair AB or generate 46.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.0% |
| Values | Daily Returns |
Systemair AB vs. SANTANDER UK 8
Performance |
| Timeline |
| Systemair AB |
| SANTANDER UK 8 |
Systemair and SANTANDER Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Systemair and SANTANDER
The main advantage of trading using opposite Systemair and SANTANDER positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Systemair position performs unexpectedly, SANTANDER 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 SANTANDER will offset losses from the drop in SANTANDER's long position.| Systemair vs. Samsung Electronics Co | Systemair vs. Samsung Electronics Co | Systemair vs. Hyundai Motor | Systemair vs. Reliance Industries Ltd |
| SANTANDER vs. GreenX Metals | SANTANDER vs. Games Workshop Group | SANTANDER vs. Systemair AB | SANTANDER 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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