Correlation Between Systemair and Batm Advanced

Can any of the company-specific risk be diversified away by investing in both Systemair and Batm Advanced 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 Batm Advanced into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Systemair AB and Batm Advanced Communications, you can compare the effects of market volatilities on Systemair and Batm Advanced 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 Batm Advanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Systemair and Batm Advanced.

Diversification Opportunities for Systemair and Batm Advanced

-0.07

Correlation Coefficient

Systemair  Batm Advanced

Good diversification

The 3 months correlation between Systemair and Batm is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Systemair AB and Batm Advanced Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Batm Advanced Commun 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 Batm Advanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Batm Advanced Commun has no effect on the direction of Systemair i.e., Systemair and Batm Advanced go up and down completely randomly.

Pair Corralation between Systemair and Batm Advanced

Assuming the 90 days trading horizon Systemair AB is expected to under-perform the Batm Advanced. In addition to that, Systemair is 1.22 times more volatile than Batm Advanced Communications. It trades about -0.07 of its total potential returns per unit of risk. Batm Advanced Communications is currently generating about 0.01 per unit of volatility. If you would invest  1,738  in Batm Advanced Communications on December 1, 2024 and sell it today you would lose (3.00) from holding Batm Advanced Communications or give up 0.17% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Systemair AB  vs.  Batm Advanced Communications

Systemair AB

Risk-Adjusted Performance

Very Weak

Over the last 90 days Systemair AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Batm Advanced Commun

Risk-Adjusted Performance

Very Weak

Over the last 90 days Batm Advanced Communications has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Batm Advanced is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Systemair and Batm Advanced

The main advantage of trading using opposite Systemair and Batm Advanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Systemair position performs unexpectedly, Batm Advanced 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 Batm Advanced will offset losses from the drop in Batm Advanced's long position.

The idea behind Systemair AB and Batm Advanced Communications pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Bonds Directory module to find actively traded corporate debentures issued by US companies.