Correlation Between Systemair and FormPipe Software
Can any of the company-specific risk be diversified away by investing in both Systemair and FormPipe Software 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 FormPipe Software into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Systemair AB and FormPipe Software AB, you can compare the effects of market volatilities on Systemair and FormPipe Software 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 FormPipe Software. Check out your portfolio center. Please also check ongoing floating volatility patterns of Systemair and FormPipe Software.
Diversification Opportunities for Systemair and FormPipe Software
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Systemair and FormPipe is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Systemair AB and FormPipe Software AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FormPipe Software 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 FormPipe Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FormPipe Software has no effect on the direction of Systemair i.e., Systemair and FormPipe Software go up and down completely randomly.
Pair Corralation between Systemair and FormPipe Software
Assuming the 90 days trading horizon Systemair AB is expected to generate 1.44 times more return on investment than FormPipe Software. However, Systemair is 1.44 times more volatile than FormPipe Software AB. It trades about 0.15 of its potential returns per unit of risk. FormPipe Software AB is currently generating about -0.07 per unit of risk. If you would invest 8,520 in Systemair AB on August 29, 2024 and sell it today you would earn a total of 690.00 from holding Systemair AB or generate 8.1% 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. FormPipe Software AB
Performance |
| Timeline |
| Systemair AB |
| FormPipe Software |
Systemair and FormPipe Software Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Systemair and FormPipe Software
The main advantage of trading using opposite Systemair and FormPipe Software positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Systemair position performs unexpectedly, FormPipe Software 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 FormPipe Software will offset losses from the drop in FormPipe Software's long position.| Systemair vs. Addtech AB | Systemair vs. Teqnion AB | Systemair vs. Vitec Software Group | Systemair vs. Lagercrantz Group AB |
| FormPipe Software vs. Enea AB | FormPipe Software vs. Novotek AB | FormPipe Software vs. Addnode Group AB | FormPipe Software vs. Softronic 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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