Correlation Between SYSTEMAIR and Schibsted ASA
Can any of the company-specific risk be diversified away by investing in both SYSTEMAIR and Schibsted ASA 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 Schibsted ASA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SYSTEMAIR AB and Schibsted ASA B, you can compare the effects of market volatilities on SYSTEMAIR and Schibsted ASA 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 Schibsted ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of SYSTEMAIR and Schibsted ASA.
Diversification Opportunities for SYSTEMAIR and Schibsted ASA
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SYSTEMAIR and Schibsted is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding SYSTEMAIR AB and Schibsted ASA B in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Schibsted ASA B 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 Schibsted ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Schibsted ASA B has no effect on the direction of SYSTEMAIR i.e., SYSTEMAIR and Schibsted ASA go up and down completely randomly.
Pair Corralation between SYSTEMAIR and Schibsted ASA
Assuming the 90 days trading horizon SYSTEMAIR AB is expected to generate 1.69 times more return on investment than Schibsted ASA. However, SYSTEMAIR is 1.69 times more volatile than Schibsted ASA B. It trades about -0.07 of its potential returns per unit of risk. Schibsted ASA B is currently generating about -0.13 per unit of risk. If you would invest 782.00 in SYSTEMAIR AB on October 30, 2024 and sell it today you would lose (67.00) from holding SYSTEMAIR AB or give up 8.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SYSTEMAIR AB vs. Schibsted ASA B
Performance |
| Timeline |
| SYSTEMAIR AB |
| Schibsted ASA B |
SYSTEMAIR and Schibsted ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SYSTEMAIR and Schibsted ASA
The main advantage of trading using opposite SYSTEMAIR and Schibsted ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SYSTEMAIR position performs unexpectedly, Schibsted ASA 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 Schibsted ASA will offset losses from the drop in Schibsted ASA's long position.| SYSTEMAIR vs. CN MODERN DAIRY | SYSTEMAIR vs. Axfood AB | SYSTEMAIR vs. Goodyear Tire Rubber | SYSTEMAIR vs. Lery Seafood Group |
| Schibsted ASA vs. RELX PLC | Schibsted ASA vs. Relx PLC ADR | Schibsted ASA vs. Wolters Kluwer NV | Schibsted ASA vs. WOLTERS KLUWER ADR |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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