Correlation Between Lindab International and Systemair
Can any of the company-specific risk be diversified away by investing in both Lindab International 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 Lindab International and Systemair into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lindab International AB and Systemair AB, you can compare the effects of market volatilities on Lindab International 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 Lindab International with a short position of Systemair. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lindab International and Systemair.
Diversification Opportunities for Lindab International and Systemair
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Lindab and Systemair is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Lindab International AB and Systemair AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Systemair AB and Lindab International 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 Lindab International AB 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 Lindab International i.e., Lindab International and Systemair go up and down completely randomly.
Pair Corralation between Lindab International and Systemair
Assuming the 90 days trading horizon Lindab International AB is expected to generate 0.97 times more return on investment than Systemair. However, Lindab International AB is 1.03 times less risky than Systemair. It trades about 0.05 of its potential returns per unit of risk. Systemair AB is currently generating about 0.02 per unit of risk. If you would invest 17,015 in Lindab International AB on August 29, 2024 and sell it today you would earn a total of 6,425 from holding Lindab International AB or generate 37.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lindab International AB vs. Systemair AB
Performance |
| Timeline |
| Lindab International |
| Systemair AB |
Lindab International and Systemair Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lindab International and Systemair
The main advantage of trading using opposite Lindab International and Systemair positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lindab International 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.| Lindab International vs. Addtech AB | Lindab International vs. Teqnion AB | Lindab International vs. Vitec Software Group | Lindab International vs. Lagercrantz Group AB |
| Systemair vs. Addtech AB | Systemair vs. Teqnion AB | Systemair vs. Vitec Software Group | Systemair vs. Lagercrantz Group AB |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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