Correlation Between Thyssenkrupp and SYSTEMAIR
Can any of the company-specific risk be diversified away by investing in both Thyssenkrupp and SYSTEMAIR 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 Thyssenkrupp and SYSTEMAIR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between thyssenkrupp AG and SYSTEMAIR AB, you can compare the effects of market volatilities on Thyssenkrupp and SYSTEMAIR 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 Thyssenkrupp with a short position of SYSTEMAIR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thyssenkrupp and SYSTEMAIR.
Diversification Opportunities for Thyssenkrupp and SYSTEMAIR
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Thyssenkrupp and SYSTEMAIR is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding thyssenkrupp AG and SYSTEMAIR AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SYSTEMAIR AB and Thyssenkrupp 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 thyssenkrupp AG are associated (or correlated) with SYSTEMAIR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SYSTEMAIR AB has no effect on the direction of Thyssenkrupp i.e., Thyssenkrupp and SYSTEMAIR go up and down completely randomly.
Pair Corralation between Thyssenkrupp and SYSTEMAIR
Assuming the 90 days horizon thyssenkrupp AG is expected to under-perform the SYSTEMAIR. But the stock apears to be less risky and, when comparing its historical volatility, thyssenkrupp AG is 1.18 times less risky than SYSTEMAIR. The stock trades about -0.03 of its potential returns per unit of risk. The SYSTEMAIR AB is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 563.00 in SYSTEMAIR AB on September 3, 2024 and sell it today you would earn a total of 219.00 from holding SYSTEMAIR AB or generate 38.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
thyssenkrupp AG vs. SYSTEMAIR AB
Performance |
| Timeline |
| thyssenkrupp AG |
| SYSTEMAIR AB |
Thyssenkrupp and SYSTEMAIR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thyssenkrupp and SYSTEMAIR
The main advantage of trading using opposite Thyssenkrupp and SYSTEMAIR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thyssenkrupp position performs unexpectedly, SYSTEMAIR 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 SYSTEMAIR will offset losses from the drop in SYSTEMAIR's long position.| Thyssenkrupp vs. Canon Marketing Japan | Thyssenkrupp vs. BlueScope Steel Limited | Thyssenkrupp vs. Khiron Life Sciences | Thyssenkrupp vs. SIDETRADE EO 1 |
| SYSTEMAIR vs. SAFETY MEDICAL PROD | SYSTEMAIR vs. THORNEY TECHS LTD | SYSTEMAIR vs. RCM TECHNOLOGIES | SYSTEMAIR vs. Microbot Medical |
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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