Correlation Between SYSTEMAIR and TRADEGATE
Can any of the company-specific risk be diversified away by investing in both SYSTEMAIR and TRADEGATE 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 TRADEGATE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SYSTEMAIR AB and TRADEGATE, you can compare the effects of market volatilities on SYSTEMAIR and TRADEGATE 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 TRADEGATE. Check out your portfolio center. Please also check ongoing floating volatility patterns of SYSTEMAIR and TRADEGATE.
Diversification Opportunities for SYSTEMAIR and TRADEGATE
Very weak diversification
The 3 months correlation between SYSTEMAIR and TRADEGATE is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding SYSTEMAIR AB and TRADEGATE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TRADEGATE 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 TRADEGATE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TRADEGATE has no effect on the direction of SYSTEMAIR i.e., SYSTEMAIR and TRADEGATE go up and down completely randomly.
Pair Corralation between SYSTEMAIR and TRADEGATE
Assuming the 90 days trading horizon SYSTEMAIR AB is expected to generate 3.6 times more return on investment than TRADEGATE. However, SYSTEMAIR is 3.6 times more volatile than TRADEGATE. It trades about 0.05 of its potential returns per unit of risk. TRADEGATE is currently generating about -0.04 per unit of risk. If you would invest 411.00 in SYSTEMAIR AB on October 13, 2024 and sell it today you would earn a total of 332.00 from holding SYSTEMAIR AB or generate 80.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
SYSTEMAIR AB vs. TRADEGATE
Performance |
| Timeline |
| SYSTEMAIR AB |
| TRADEGATE |
SYSTEMAIR and TRADEGATE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SYSTEMAIR and TRADEGATE
The main advantage of trading using opposite SYSTEMAIR and TRADEGATE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SYSTEMAIR position performs unexpectedly, TRADEGATE 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 TRADEGATE will offset losses from the drop in TRADEGATE's long position.| SYSTEMAIR vs. GRIFFIN MINING LTD | SYSTEMAIR vs. Playa Hotels Resorts | SYSTEMAIR vs. Jacquet Metal Service | SYSTEMAIR vs. Zijin Mining Group |
| TRADEGATE vs. SYSTEMAIR AB | TRADEGATE vs. alstria office REIT AG | TRADEGATE vs. WIZZ AIR HLDGUNSPADR4 | TRADEGATE vs. Alaska Air 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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