Correlation Between Systemair and Svenska Handelsbanken
Can any of the company-specific risk be diversified away by investing in both Systemair and Svenska Handelsbanken 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 Svenska Handelsbanken into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Systemair AB and Svenska Handelsbanken AB, you can compare the effects of market volatilities on Systemair and Svenska Handelsbanken 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 Svenska Handelsbanken. Check out your portfolio center. Please also check ongoing floating volatility patterns of Systemair and Svenska Handelsbanken.
Diversification Opportunities for Systemair and Svenska Handelsbanken
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Systemair and Svenska is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Systemair AB and Svenska Handelsbanken AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Svenska Handelsbanken 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 Svenska Handelsbanken. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Svenska Handelsbanken has no effect on the direction of Systemair i.e., Systemair and Svenska Handelsbanken go up and down completely randomly.
Pair Corralation between Systemair and Svenska Handelsbanken
Assuming the 90 days trading horizon Systemair AB is expected to generate 3.18 times more return on investment than Svenska Handelsbanken. However, Systemair is 3.18 times more volatile than Svenska Handelsbanken AB. It trades about 0.18 of its potential returns per unit of risk. Svenska Handelsbanken AB is currently generating about 0.06 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 Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Systemair AB vs. Svenska Handelsbanken AB
Performance |
| Timeline |
| Systemair AB |
| Svenska Handelsbanken |
Systemair and Svenska Handelsbanken Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Systemair and Svenska Handelsbanken
The main advantage of trading using opposite Systemair and Svenska Handelsbanken positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Systemair position performs unexpectedly, Svenska Handelsbanken 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 Svenska Handelsbanken will offset losses from the drop in Svenska Handelsbanken's long position.| Systemair vs. Lindab International AB | Systemair vs. Nolato AB | Systemair vs. Sweco AB | Systemair vs. Troax Group AB |
| Svenska Handelsbanken vs. Svenska Handelsbanken AB | Svenska Handelsbanken vs. Nordea Bank Abp | Svenska Handelsbanken vs. Atlas Copco AB | Svenska Handelsbanken vs. Skandinaviska Enskilda Banken |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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