Correlation Between Young Cos and Systemair
Can any of the company-specific risk be diversified away by investing in both Young Cos 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 Young Cos and Systemair into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Young Cos Brewery and Systemair AB, you can compare the effects of market volatilities on Young Cos 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 Young Cos with a short position of Systemair. Check out your portfolio center. Please also check ongoing floating volatility patterns of Young Cos and Systemair.
Diversification Opportunities for Young Cos and Systemair
Very good diversification
The 3 months correlation between Young and Systemair is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Young Cos Brewery and Systemair AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Systemair AB and Young Cos 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 Young Cos Brewery 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 Young Cos i.e., Young Cos and Systemair go up and down completely randomly.
Pair Corralation between Young Cos and Systemair
Assuming the 90 days trading horizon Young Cos is expected to generate 3.84 times less return on investment than Systemair. But when comparing it to its historical volatility, Young Cos Brewery is 1.31 times less risky than Systemair. It trades about 0.07 of its potential returns per unit of risk. Systemair AB is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 8,320 in Systemair AB on August 25, 2024 and sell it today you would earn a total of 760.00 from holding Systemair AB or generate 9.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Young Cos Brewery vs. Systemair AB
Performance |
| Timeline |
| Young Cos Brewery |
| Systemair AB |
Young Cos and Systemair Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Young Cos and Systemair
The main advantage of trading using opposite Young Cos and Systemair positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Young Cos 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.| Young Cos vs. Toyota Motor Corp | Young Cos vs. SoftBank Group Corp | Young Cos vs. State Bank of | Young Cos vs. Freddie Mac |
| Systemair vs. X FAB Silicon Foundries | Systemair vs. Darden Restaurants | Systemair vs. Summit Materials Cl | Systemair vs. Take Two Interactive Software |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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