Correlation Between Systemair and Mindflair Plc

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

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

Diversification Opportunities for Systemair and Mindflair Plc

-0.36

Correlation Coefficient

Systemair  Mindflair Plc

Very good diversification

The 3 months correlation between Systemair and Mindflair is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Systemair AB and Mindflair Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mindflair Plc 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 Mindflair Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mindflair Plc has no effect on the direction of Systemair i.e., Systemair and Mindflair Plc go up and down completely randomly.

Pair Corralation between Systemair and Mindflair Plc

Assuming the 90 days trading horizon Systemair AB is expected to under-perform the Mindflair Plc. But the stock apears to be less risky and, when comparing its historical volatility, Systemair AB is 6.24 times less risky than Mindflair Plc. The stock trades about -0.09 of its potential returns per unit of risk. The Mindflair Plc is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  60.00  in Mindflair Plc on December 26, 2024 and sell it today you would earn a total of  30.00  from holding Mindflair Plc or generate 50.0% return on investment over 90 days.

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

Systemair AB  vs.  Mindflair Plc

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 uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Mindflair Plc

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Mindflair Plc are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Mindflair Plc unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Systemair and Mindflair Plc

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

The idea behind Systemair AB and Mindflair Plc 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.