Correlation Between Systemair and Investment
Can any of the company-specific risk be diversified away by investing in both Systemair and 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 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 Investment AB Oresund, you can compare the effects of market volatilities on Systemair and 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 Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Systemair and Investment.
Diversification Opportunities for Systemair and Investment
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Systemair and Investment is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Systemair AB and Investment AB Oresund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Investment AB Oresund 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 Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Investment AB Oresund has no effect on the direction of Systemair i.e., Systemair and Investment go up and down completely randomly.
Pair Corralation between Systemair and Investment
Assuming the 90 days trading horizon Systemair AB is expected to generate 2.73 times more return on investment than Investment. However, Systemair is 2.73 times more volatile than Investment AB Oresund. It trades about 0.18 of its potential returns per unit of risk. Investment AB Oresund is currently generating about -0.17 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 Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Systemair AB vs. Investment AB Oresund
Performance |
| Timeline |
| Systemair AB |
| Investment AB Oresund |
Systemair and Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Systemair and Investment
The main advantage of trading using opposite Systemair and Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Systemair position performs unexpectedly, 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 Investment will offset losses from the drop in Investment's long position.| Systemair vs. Lindab International AB | Systemair vs. Nolato AB | Systemair vs. Sweco AB | Systemair vs. Troax Group AB |
| Investment vs. Bure Equity AB | Investment vs. Creades AB | Investment vs. L E Lundbergfretagen | Investment vs. Industrivarden AB ser |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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