Correlation Between White Pearl and Systemair
Can any of the company-specific risk be diversified away by investing in both White Pearl 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 White Pearl and Systemair into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between White Pearl Technology and Systemair AB, you can compare the effects of market volatilities on White Pearl 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 White Pearl with a short position of Systemair. Check out your portfolio center. Please also check ongoing floating volatility patterns of White Pearl and Systemair.
Diversification Opportunities for White Pearl and Systemair
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between White and Systemair is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding White Pearl Technology and Systemair AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Systemair AB and White Pearl 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 White Pearl Technology 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 White Pearl i.e., White Pearl and Systemair go up and down completely randomly.
Pair Corralation between White Pearl and Systemair
Assuming the 90 days trading horizon White Pearl Technology is expected to generate 2.76 times more return on investment than Systemair. However, White Pearl is 2.76 times more volatile than Systemair AB. It trades about 0.39 of its potential returns per unit of risk. Systemair AB is currently generating about 0.15 per unit of risk. If you would invest 359.00 in White Pearl Technology on August 29, 2024 and sell it today you would earn a total of 261.00 from holding White Pearl Technology or generate 72.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
White Pearl Technology vs. Systemair AB
Performance |
| Timeline |
| White Pearl Technology |
| Systemair AB |
White Pearl and Systemair Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with White Pearl and Systemair
The main advantage of trading using opposite White Pearl and Systemair positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if White Pearl 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.| White Pearl vs. AstraZeneca PLC | White Pearl vs. Investor AB ser | White Pearl vs. Investor AB ser | White Pearl vs. Atlas Copco AB |
| Systemair vs. Addtech AB | Systemair vs. Teqnion AB | Systemair vs. Vitec Software Group | Systemair vs. Lagercrantz 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 Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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