Correlation Between Systemair and OEM International
Can any of the company-specific risk be diversified away by investing in both Systemair and OEM International 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 OEM International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Systemair AB and OEM International AB, you can compare the effects of market volatilities on Systemair and OEM International 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 OEM International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Systemair and OEM International.
Diversification Opportunities for Systemair and OEM International
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Systemair and OEM is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Systemair AB and OEM International AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OEM International 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 OEM International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OEM International has no effect on the direction of Systemair i.e., Systemair and OEM International go up and down completely randomly.
Pair Corralation between Systemair and OEM International
Assuming the 90 days trading horizon Systemair AB is expected to generate 1.36 times more return on investment than OEM International. However, Systemair is 1.36 times more volatile than OEM International AB. It trades about 0.18 of its potential returns per unit of risk. OEM International AB is currently generating about -0.04 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 | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Systemair AB vs. OEM International AB
Performance |
| Timeline |
| Systemair AB |
| OEM International |
Systemair and OEM International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Systemair and OEM International
The main advantage of trading using opposite Systemair and OEM International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Systemair position performs unexpectedly, OEM International 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 OEM International will offset losses from the drop in OEM International's long position.| Systemair vs. Lindab International AB | Systemair vs. Nolato AB | Systemair vs. Sweco AB | Systemair vs. Troax Group AB |
| OEM International vs. Bufab Holding AB | OEM International vs. Lagercrantz Group AB | OEM International vs. Troax Group AB | OEM International vs. Nolato 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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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