Correlation Between SYSTEMAIR and Gecina SA
Can any of the company-specific risk be diversified away by investing in both SYSTEMAIR and Gecina SA 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 Gecina SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SYSTEMAIR AB and Gecina SA, you can compare the effects of market volatilities on SYSTEMAIR and Gecina SA 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 Gecina SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of SYSTEMAIR and Gecina SA.
Diversification Opportunities for SYSTEMAIR and Gecina SA
Very good diversification
The 3 months correlation between SYSTEMAIR and Gecina is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding SYSTEMAIR AB and Gecina SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gecina SA 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 Gecina SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gecina SA has no effect on the direction of SYSTEMAIR i.e., SYSTEMAIR and Gecina SA go up and down completely randomly.
Pair Corralation between SYSTEMAIR and Gecina SA
Assuming the 90 days trading horizon SYSTEMAIR AB is expected to generate 3.13 times more return on investment than Gecina SA. However, SYSTEMAIR is 3.13 times more volatile than Gecina SA. It trades about 0.16 of its potential returns per unit of risk. Gecina SA is currently generating about -0.19 per unit of risk. If you would invest 727.00 in SYSTEMAIR AB on September 13, 2024 and sell it today you would earn a total of 78.00 from holding SYSTEMAIR AB or generate 10.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
SYSTEMAIR AB vs. Gecina SA
Performance |
| Timeline |
| SYSTEMAIR AB |
| Gecina SA |
SYSTEMAIR and Gecina SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SYSTEMAIR and Gecina SA
The main advantage of trading using opposite SYSTEMAIR and Gecina SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SYSTEMAIR position performs unexpectedly, Gecina SA 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 Gecina SA will offset losses from the drop in Gecina SA's long position.The idea behind SYSTEMAIR AB and Gecina SA 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.| Gecina SA vs. Broadcom | Gecina SA vs. Fukuyama Transporting Co | Gecina SA vs. EVS Broadcast Equipment | Gecina SA vs. DISTRICT METALS |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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