Correlation Between Investment and Systemair
Can any of the company-specific risk be diversified away by investing in both Investment 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 Investment and Systemair into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Investment AB Oresund and Systemair AB, you can compare the effects of market volatilities on Investment 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 Investment with a short position of Systemair. Check out your portfolio center. Please also check ongoing floating volatility patterns of Investment and Systemair.
Diversification Opportunities for Investment and Systemair
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Investment and Systemair is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Investment AB Oresund and Systemair AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Systemair AB and Investment 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 Investment AB Oresund 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 Investment i.e., Investment and Systemair go up and down completely randomly.
Pair Corralation between Investment and Systemair
Assuming the 90 days trading horizon Investment AB Oresund is expected to under-perform the Systemair. But the stock apears to be less risky and, when comparing its historical volatility, Investment AB Oresund is 2.73 times less risky than Systemair. The stock trades about -0.17 of its potential returns per unit of risk. The Systemair AB is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 8,610 in Systemair AB on September 12, 2024 and sell it today you would earn a total of 1,170 from holding Systemair AB or generate 13.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Investment AB Oresund vs. Systemair AB
Performance |
| Timeline |
| Investment AB Oresund |
| Systemair AB |
Investment and Systemair Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Investment and Systemair
The main advantage of trading using opposite Investment and Systemair positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Investment 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.| Investment vs. Bure Equity AB | Investment vs. Creades AB | Investment vs. L E Lundbergfretagen | Investment vs. Industrivarden AB ser |
| Systemair vs. Lindab International AB | Systemair vs. Nolato AB | Systemair vs. Sweco AB | Systemair vs. Troax 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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