Correlation Between GoldMining and Systemair
Can any of the company-specific risk be diversified away by investing in both GoldMining 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 GoldMining and Systemair into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GoldMining and Systemair AB, you can compare the effects of market volatilities on GoldMining 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 GoldMining with a short position of Systemair. Check out your portfolio center. Please also check ongoing floating volatility patterns of GoldMining and Systemair.
Diversification Opportunities for GoldMining and Systemair
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GoldMining and Systemair is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding GoldMining and Systemair AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Systemair AB and GoldMining 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 GoldMining 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 GoldMining i.e., GoldMining and Systemair go up and down completely randomly.
Pair Corralation between GoldMining and Systemair
Assuming the 90 days trading horizon GoldMining is expected to under-perform the Systemair. In addition to that, GoldMining is 1.52 times more volatile than Systemair AB. It trades about -0.2 of its total potential returns per unit of risk. Systemair AB is currently generating about 0.22 per unit of volatility. If you would invest 8,510 in Systemair AB on August 28, 2024 and sell it today you would earn a total of 850.00 from holding Systemair AB or generate 9.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 63.64% |
| Values | Daily Returns |
GoldMining vs. Systemair AB
Performance |
| Timeline |
| GoldMining |
| Systemair AB |
GoldMining and Systemair Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GoldMining and Systemair
The main advantage of trading using opposite GoldMining and Systemair positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GoldMining 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.| GoldMining vs. Samsung Electronics Co | GoldMining vs. Samsung Electronics Co | GoldMining vs. Hyundai Motor | GoldMining vs. Toyota Motor Corp |
| Systemair vs. Cornish Metals | Systemair vs. GoldMining | Systemair vs. GreenX Metals | Systemair vs. Leroy Seafood 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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