Correlation Between Systemair and Rejlers AB
Can any of the company-specific risk be diversified away by investing in both Systemair and Rejlers AB 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 Rejlers AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Systemair AB and Rejlers AB, you can compare the effects of market volatilities on Systemair and Rejlers AB 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 Rejlers AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Systemair and Rejlers AB.
Diversification Opportunities for Systemair and Rejlers AB
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Systemair and Rejlers is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Systemair AB and Rejlers AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rejlers 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 Rejlers AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rejlers AB has no effect on the direction of Systemair i.e., Systemair and Rejlers AB go up and down completely randomly.
Pair Corralation between Systemair and Rejlers AB
Assuming the 90 days trading horizon Systemair AB is expected to generate 1.1 times more return on investment than Rejlers AB. However, Systemair is 1.1 times more volatile than Rejlers AB. It trades about 0.04 of its potential returns per unit of risk. Rejlers AB is currently generating about 0.02 per unit of risk. If you would invest 6,665 in Systemair AB on August 30, 2024 and sell it today you would earn a total of 2,445 from holding Systemair AB or generate 36.68% 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. Rejlers AB
Performance |
| Timeline |
| Systemair AB |
| Rejlers AB |
Systemair and Rejlers AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Systemair and Rejlers AB
The main advantage of trading using opposite Systemair and Rejlers AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Systemair position performs unexpectedly, Rejlers AB 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 Rejlers AB will offset losses from the drop in Rejlers AB's long position.| Systemair vs. Lindab International AB | Systemair vs. Nolato AB | Systemair vs. Sweco AB | Systemair vs. Troax Group AB |
| Rejlers AB vs. Proact IT Group | Rejlers AB vs. Nederman Holding AB | Rejlers AB vs. Sweco AB | Rejlers AB vs. Rottneros 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 Global Correlations module to find global opportunities by holding instruments from different markets.
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