Correlation Between Promotora and Systemair
Can any of the company-specific risk be diversified away by investing in both Promotora and Systemair 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 Promotora and Systemair into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Promotora de Informaciones and Systemair AB, you can compare the effects of market volatilities on Promotora and Systemair 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 Promotora with a short position of Systemair. Check out your portfolio center. Please also check ongoing floating volatility patterns of Promotora and Systemair.
Diversification Opportunities for Promotora and Systemair
Very good diversification
The 3 months correlation between Promotora and Systemair is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Promotora de Informaciones and Systemair AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Systemair AB and Promotora 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 Promotora de Informaciones are associated (or correlated) with Systemair. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Systemair AB has no effect on the direction of Promotora i.e., Promotora and Systemair go up and down completely randomly.
Pair Corralation between Promotora and Systemair
Assuming the 90 days trading horizon Promotora is expected to generate 1.45 times less return on investment than Systemair. But when comparing it to its historical volatility, Promotora de Informaciones is 1.11 times less risky than Systemair. It trades about 0.04 of its potential returns per unit of risk. Systemair AB is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 7,563 in Systemair AB on September 4, 2024 and sell it today you would earn a total of 1,657 from holding Systemair AB or generate 21.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.8% |
| Values | Daily Returns |
Promotora de Informaciones vs. Systemair AB
Performance |
| Timeline |
| Promotora de Informa |
| Systemair AB |
Promotora and Systemair Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Promotora and Systemair
The main advantage of trading using opposite Promotora and Systemair positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Promotora position performs unexpectedly, Systemair 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 Systemair will offset losses from the drop in Systemair's long position.| Promotora vs. Systemair AB | Promotora vs. Finnair Oyj | Promotora vs. Auto Trader Group | Promotora vs. Science in Sport |
| Systemair vs. Samsung Electronics Co | Systemair vs. Samsung Electronics Co | Systemair vs. Hyundai Motor | Systemair vs. Toyota Motor Corp |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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