Correlation Between SOL-GEL TECHN and SYSTEMAIR
Can any of the company-specific risk be diversified away by investing in both SOL-GEL TECHN 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 SOL-GEL TECHN and SYSTEMAIR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SOL GEL TECHN IS 10 and SYSTEMAIR AB, you can compare the effects of market volatilities on SOL-GEL TECHN 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 SOL-GEL TECHN with a short position of SYSTEMAIR. Check out your portfolio center. Please also check ongoing floating volatility patterns of SOL-GEL TECHN and SYSTEMAIR.
Diversification Opportunities for SOL-GEL TECHN and SYSTEMAIR
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between SOL-GEL and SYSTEMAIR is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding SOL GEL TECHN IS 10 and SYSTEMAIR AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SYSTEMAIR AB and SOL-GEL TECHN 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 SOL GEL TECHN IS 10 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 SOL-GEL TECHN i.e., SOL-GEL TECHN and SYSTEMAIR go up and down completely randomly.
Pair Corralation between SOL-GEL TECHN and SYSTEMAIR
Assuming the 90 days horizon SOL GEL TECHN IS 10 is expected to generate 2.85 times more return on investment than SYSTEMAIR. However, SOL-GEL TECHN is 2.85 times more volatile than SYSTEMAIR AB. It trades about 0.13 of its potential returns per unit of risk. SYSTEMAIR AB is currently generating about 0.1 per unit of risk. If you would invest 46.00 in SOL GEL TECHN IS 10 on September 14, 2024 and sell it today you would earn a total of 9.00 from holding SOL GEL TECHN IS 10 or generate 19.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SOL GEL TECHN IS 10 vs. SYSTEMAIR AB
Performance |
| Timeline |
| SOL GEL TECHN |
| SYSTEMAIR AB |
SOL-GEL TECHN and SYSTEMAIR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SOL-GEL TECHN and SYSTEMAIR
The main advantage of trading using opposite SOL-GEL TECHN and SYSTEMAIR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SOL-GEL TECHN 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.| SOL-GEL TECHN vs. SYSTEMAIR AB | SOL-GEL TECHN vs. ALTAIR RES INC | SOL-GEL TECHN vs. Vastned Retail NV | SOL-GEL TECHN vs. National Retail Properties |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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