Correlation Between SYSTEMAIR and EAST SIDE
Can any of the company-specific risk be diversified away by investing in both SYSTEMAIR and EAST SIDE 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 EAST SIDE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SYSTEMAIR AB and EAST SIDE GAMES, you can compare the effects of market volatilities on SYSTEMAIR and EAST SIDE 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 EAST SIDE. Check out your portfolio center. Please also check ongoing floating volatility patterns of SYSTEMAIR and EAST SIDE.
Diversification Opportunities for SYSTEMAIR and EAST SIDE
Very good diversification
The 3 months correlation between SYSTEMAIR and EAST is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding SYSTEMAIR AB and EAST SIDE GAMES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EAST SIDE GAMES 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 EAST SIDE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EAST SIDE GAMES has no effect on the direction of SYSTEMAIR i.e., SYSTEMAIR and EAST SIDE go up and down completely randomly.
Pair Corralation between SYSTEMAIR and EAST SIDE
Assuming the 90 days trading horizon SYSTEMAIR AB is expected to generate 0.3 times more return on investment than EAST SIDE. However, SYSTEMAIR AB is 3.33 times less risky than EAST SIDE. It trades about 0.31 of its potential returns per unit of risk. EAST SIDE GAMES is currently generating about -0.18 per unit of risk. If you would invest 696.00 in SYSTEMAIR AB on September 2, 2024 and sell it today you would earn a total of 86.00 from holding SYSTEMAIR AB or generate 12.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SYSTEMAIR AB vs. EAST SIDE GAMES
Performance |
| Timeline |
| SYSTEMAIR AB |
| EAST SIDE GAMES |
SYSTEMAIR and EAST SIDE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SYSTEMAIR and EAST SIDE
The main advantage of trading using opposite SYSTEMAIR and EAST SIDE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SYSTEMAIR position performs unexpectedly, EAST SIDE 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 EAST SIDE will offset losses from the drop in EAST SIDE's long position.The idea behind SYSTEMAIR AB and EAST SIDE GAMES pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| EAST SIDE vs. Nintendo Co | EAST SIDE vs. Sea Limited | EAST SIDE vs. Superior Plus Corp | EAST SIDE vs. NMI Holdings |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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