Correlation Between Mount Gibson and SYSTEMAIR
Can any of the company-specific risk be diversified away by investing in both Mount Gibson and SYSTEMAIR 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 Mount Gibson and SYSTEMAIR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mount Gibson Iron and SYSTEMAIR AB, you can compare the effects of market volatilities on Mount Gibson and SYSTEMAIR 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 Mount Gibson with a short position of SYSTEMAIR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mount Gibson and SYSTEMAIR.
Diversification Opportunities for Mount Gibson and SYSTEMAIR
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Mount and SYSTEMAIR is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Mount Gibson Iron and SYSTEMAIR AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SYSTEMAIR AB and Mount Gibson 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 Mount Gibson Iron are associated (or correlated) with SYSTEMAIR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SYSTEMAIR AB has no effect on the direction of Mount Gibson i.e., Mount Gibson and SYSTEMAIR go up and down completely randomly.
Pair Corralation between Mount Gibson and SYSTEMAIR
Assuming the 90 days horizon Mount Gibson Iron is expected to under-perform the SYSTEMAIR. In addition to that, Mount Gibson is 1.49 times more volatile than SYSTEMAIR AB. It trades about -0.01 of its total potential returns per unit of risk. SYSTEMAIR AB is currently generating about 0.01 per unit of volatility. If you would invest 713.00 in SYSTEMAIR AB on October 25, 2024 and sell it today you would earn a total of 1.00 from holding SYSTEMAIR AB or generate 0.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mount Gibson Iron vs. SYSTEMAIR AB
Performance |
| Timeline |
| Mount Gibson Iron |
| SYSTEMAIR AB |
Mount Gibson and SYSTEMAIR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mount Gibson and SYSTEMAIR
The main advantage of trading using opposite Mount Gibson and SYSTEMAIR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mount Gibson position performs unexpectedly, SYSTEMAIR 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 SYSTEMAIR will offset losses from the drop in SYSTEMAIR's long position.| Mount Gibson vs. SYSTEMAIR AB | Mount Gibson vs. Fevertree Drinks PLC | Mount Gibson vs. SEALED AIR | Mount Gibson vs. United Breweries Co |
| SYSTEMAIR vs. Plastic Omnium | SYSTEMAIR vs. NEWELL RUBBERMAID | SYSTEMAIR vs. United Insurance Holdings | SYSTEMAIR vs. EAGLE MATERIALS |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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