Correlation Between Systemair and MTI Investment

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Can any of the company-specific risk be diversified away by investing in both Systemair and MTI Investment 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 MTI Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Systemair AB and MTI Investment SE, you can compare the effects of market volatilities on Systemair and MTI Investment 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 MTI Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Systemair and MTI Investment.

Diversification Opportunities for Systemair and MTI Investment

-0.28
  Correlation Coefficient

Very good diversification

The 3 months correlation between Systemair and MTI is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Systemair AB and MTI Investment SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MTI Investment SE 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 MTI Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MTI Investment SE has no effect on the direction of Systemair i.e., Systemair and MTI Investment go up and down completely randomly.

Pair Corralation between Systemair and MTI Investment

Assuming the 90 days trading horizon Systemair AB is expected to generate 1.2 times more return on investment than MTI Investment. However, Systemair is 1.2 times more volatile than MTI Investment SE. It trades about 0.18 of its potential returns per unit of risk. MTI Investment SE is currently generating about 0.1 per unit of risk. 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 Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Systemair AB  vs.  MTI Investment SE

 Performance 
       Timeline  
Systemair AB 

Risk-Adjusted Performance

8 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in Systemair AB are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Systemair unveiled solid returns over the last few months and may actually be approaching a breakup point.
MTI Investment SE 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days MTI Investment SE has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's forward indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Systemair and MTI Investment Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Systemair and MTI Investment

The main advantage of trading using opposite Systemair and MTI Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Systemair position performs unexpectedly, MTI Investment 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 MTI Investment will offset losses from the drop in MTI Investment's long position.
The idea behind Systemair AB and MTI Investment SE pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.

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