Correlation Between Systemair and Elanders
Can any of the company-specific risk be diversified away by investing in both Systemair and Elanders 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 Elanders into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Systemair AB and Elanders AB, you can compare the effects of market volatilities on Systemair and Elanders 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 Elanders. Check out your portfolio center. Please also check ongoing floating volatility patterns of Systemair and Elanders.
Diversification Opportunities for Systemair and Elanders
Very good diversification
The 3 months correlation between Systemair and Elanders is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Systemair AB and Elanders AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elanders 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 Elanders. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elanders AB has no effect on the direction of Systemair i.e., Systemair and Elanders go up and down completely randomly.
Pair Corralation between Systemair and Elanders
Assuming the 90 days trading horizon Systemair AB is expected to generate 2.19 times more return on investment than Elanders. However, Systemair is 2.19 times more volatile than Elanders AB. It trades about 0.18 of its potential returns per unit of risk. Elanders AB is currently generating about -0.41 per unit of risk. If you would invest 8,520 in Systemair AB on August 27, 2024 and sell it today you would earn a total of 810.00 from holding Systemair AB or generate 9.51% 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. Elanders AB
Performance |
| Timeline |
| Systemair AB |
| Elanders AB |
Systemair and Elanders Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Systemair and Elanders
The main advantage of trading using opposite Systemair and Elanders positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Systemair position performs unexpectedly, Elanders 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 Elanders will offset losses from the drop in Elanders' long position.| Systemair vs. Lindab International AB | Systemair vs. Nolato AB | Systemair vs. Sweco AB | Systemair vs. Troax Group AB |
| Elanders vs. Inwido AB | Elanders vs. New Wave Group | Elanders vs. Lindab International AB | Elanders vs. Fagerhult 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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