Correlation Between Systemair and Seraphim Space
Can any of the company-specific risk be diversified away by investing in both Systemair and Seraphim Space 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 Seraphim Space into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Systemair AB and Seraphim Space Investment, you can compare the effects of market volatilities on Systemair and Seraphim Space 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 Seraphim Space. Check out your portfolio center. Please also check ongoing floating volatility patterns of Systemair and Seraphim Space.
Diversification Opportunities for Systemair and Seraphim Space
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Systemair and Seraphim is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Systemair AB and Seraphim Space Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seraphim Space 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 Seraphim Space. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seraphim Space Investment has no effect on the direction of Systemair i.e., Systemair and Seraphim Space go up and down completely randomly.
Pair Corralation between Systemair and Seraphim Space
Assuming the 90 days trading horizon Systemair is expected to generate 1.98 times less return on investment than Seraphim Space. In addition to that, Systemair is 1.1 times more volatile than Seraphim Space Investment. It trades about 0.29 of its total potential returns per unit of risk. Seraphim Space Investment is currently generating about 0.63 per unit of volatility. If you would invest 4,710 in Seraphim Space Investment on September 3, 2024 and sell it today you would earn a total of 1,270 from holding Seraphim Space Investment or generate 26.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Systemair AB vs. Seraphim Space Investment
Performance |
| Timeline |
| Systemair AB |
| Seraphim Space Investment |
Systemair and Seraphim Space Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Systemair and Seraphim Space
The main advantage of trading using opposite Systemair and Seraphim Space positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Systemair position performs unexpectedly, Seraphim Space 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 Seraphim Space will offset losses from the drop in Seraphim Space's long position.| Systemair vs. Batm Advanced Communications | Systemair vs. Teradata Corp | Systemair vs. SBM Offshore NV | Systemair vs. Fidelity National Information |
| Seraphim Space vs. Livermore Investments Group | Seraphim Space vs. Bankers Investment Trust | Seraphim Space vs. Schroders Investment Trusts | Seraphim Space vs. TR Property Investment |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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