Correlation Between Systemair and Creades AB
Can any of the company-specific risk be diversified away by investing in both Systemair and Creades AB 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 Creades AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Systemair AB and Creades AB, you can compare the effects of market volatilities on Systemair and Creades AB 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 Creades AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Systemair and Creades AB.
Diversification Opportunities for Systemair and Creades AB
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Systemair and Creades is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Systemair AB and Creades AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Creades AB 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 Creades AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Creades AB has no effect on the direction of Systemair i.e., Systemair and Creades AB go up and down completely randomly.
Pair Corralation between Systemair and Creades AB
Assuming the 90 days trading horizon Systemair AB is expected to generate 1.1 times more return on investment than Creades AB. However, Systemair is 1.1 times more volatile than Creades AB. It trades about 0.04 of its potential returns per unit of risk. Creades AB is currently generating about 0.01 per unit of risk. If you would invest 6,742 in Systemair AB on September 13, 2024 and sell it today you would earn a total of 3,038 from holding Systemair AB or generate 45.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Systemair AB vs. Creades AB
Performance |
| Timeline |
| Systemair AB |
| Creades AB |
Systemair and Creades AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Systemair and Creades AB
The main advantage of trading using opposite Systemair and Creades AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Systemair position performs unexpectedly, Creades AB 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 Creades AB will offset losses from the drop in Creades AB's long position.| Systemair vs. Lindab International AB | Systemair vs. Nolato AB | Systemair vs. Sweco AB | Systemair vs. Troax Group AB |
| Creades AB vs. Investment AB Latour | Creades AB vs. Bure Equity AB | Creades AB vs. Svolder AB | Creades AB vs. Kinnevik Investment 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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