Correlation Between Systemair and Transtema Group
Can any of the company-specific risk be diversified away by investing in both Systemair and Transtema Group 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 Transtema Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Systemair AB and Transtema Group AB, you can compare the effects of market volatilities on Systemair and Transtema Group 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 Transtema Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Systemair and Transtema Group.
Diversification Opportunities for Systemair and Transtema Group
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Systemair and Transtema is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Systemair AB and Transtema Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transtema Group 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 Transtema Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transtema Group AB has no effect on the direction of Systemair i.e., Systemair and Transtema Group go up and down completely randomly.
Pair Corralation between Systemair and Transtema Group
Assuming the 90 days trading horizon Systemair AB is expected to generate 1.47 times more return on investment than Transtema Group. However, Systemair is 1.47 times more volatile than Transtema Group AB. It trades about 0.25 of its potential returns per unit of risk. Transtema Group AB is currently generating about -0.16 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 Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Systemair AB vs. Transtema Group AB
Performance |
| Timeline |
| Systemair AB |
| Transtema Group AB |
Systemair and Transtema Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Systemair and Transtema Group
The main advantage of trading using opposite Systemair and Transtema Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Systemair position performs unexpectedly, Transtema Group 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 Transtema Group will offset losses from the drop in Transtema Group's long position.| Systemair vs. Lindab International AB | Systemair vs. Nolato AB | Systemair vs. Sweco AB | Systemair vs. Troax Group AB |
| Transtema Group vs. Humble Group AB | Transtema Group vs. Enad Global 7 | Transtema Group vs. Goodbye Kansas Group | Transtema Group vs. KABE Group 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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