Correlation Between SYSTEMAIR and FTC SOLAR
Can any of the company-specific risk be diversified away by investing in both SYSTEMAIR and FTC SOLAR 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 FTC SOLAR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SYSTEMAIR AB and FTC SOLAR INC, you can compare the effects of market volatilities on SYSTEMAIR and FTC SOLAR 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 FTC SOLAR. Check out your portfolio center. Please also check ongoing floating volatility patterns of SYSTEMAIR and FTC SOLAR.
Diversification Opportunities for SYSTEMAIR and FTC SOLAR
Pay attention - limited upside
The 3 months correlation between SYSTEMAIR and FTC is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding SYSTEMAIR AB and FTC SOLAR INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FTC SOLAR INC 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 FTC SOLAR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FTC SOLAR INC has no effect on the direction of SYSTEMAIR i.e., SYSTEMAIR and FTC SOLAR go up and down completely randomly.
Pair Corralation between SYSTEMAIR and FTC SOLAR
Assuming the 90 days trading horizon SYSTEMAIR AB is expected to under-perform the FTC SOLAR. But the stock apears to be less risky and, when comparing its historical volatility, SYSTEMAIR AB is 6.23 times less risky than FTC SOLAR. The stock trades about -0.15 of its potential returns per unit of risk. The FTC SOLAR INC is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 270.00 in FTC SOLAR INC on October 30, 2024 and sell it today you would earn a total of 128.00 from holding FTC SOLAR INC or generate 47.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SYSTEMAIR AB vs. FTC SOLAR INC
Performance |
| Timeline |
| SYSTEMAIR AB |
| FTC SOLAR INC |
SYSTEMAIR and FTC SOLAR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SYSTEMAIR and FTC SOLAR
The main advantage of trading using opposite SYSTEMAIR and FTC SOLAR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SYSTEMAIR position performs unexpectedly, FTC SOLAR 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 FTC SOLAR will offset losses from the drop in FTC SOLAR's long position.| SYSTEMAIR vs. CN MODERN DAIRY | SYSTEMAIR vs. Axfood AB | SYSTEMAIR vs. Goodyear Tire Rubber | SYSTEMAIR vs. Lery Seafood Group |
| FTC SOLAR vs. NEW MILLENNIUM IRON | FTC SOLAR vs. Hemisphere Energy Corp | FTC SOLAR vs. Olympic Steel | FTC SOLAR vs. Tianjin Capital Environmental |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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