Correlation Between Systemair and Svolder AB
Can any of the company-specific risk be diversified away by investing in both Systemair and Svolder 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 Svolder 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 Svolder AB, you can compare the effects of market volatilities on Systemair and Svolder 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 Svolder AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Systemair and Svolder AB.
Diversification Opportunities for Systemair and Svolder AB
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Systemair and Svolder is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Systemair AB and Svolder AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Svolder 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 Svolder AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Svolder AB has no effect on the direction of Systemair i.e., Systemair and Svolder AB go up and down completely randomly.
Pair Corralation between Systemair and Svolder AB
Assuming the 90 days trading horizon Systemair AB is expected to generate 1.62 times more return on investment than Svolder AB. However, Systemair is 1.62 times more volatile than Svolder AB. It trades about 0.25 of its potential returns per unit of risk. Svolder AB is currently generating about -0.15 per unit of risk. If you would invest 8,260 in Systemair AB on September 13, 2024 and sell it today you would earn a total of 1,520 from holding Systemair AB or generate 18.4% 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. Svolder AB
Performance |
| Timeline |
| Systemair AB |
| Svolder AB |
Systemair and Svolder AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Systemair and Svolder AB
The main advantage of trading using opposite Systemair and Svolder AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Systemair position performs unexpectedly, Svolder 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 Svolder AB will offset losses from the drop in Svolder AB's long position.| Systemair vs. Lindab International AB | Systemair vs. Nolato AB | Systemair vs. Sweco AB | Systemair vs. Troax Group AB |
| Svolder AB vs. Svolder AB | Svolder AB vs. Creades AB | Svolder AB vs. Kinnevik Investment AB | Svolder AB vs. Systemair 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 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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