Correlation Between SYSTEMAIR and Corsair Gaming

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

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

Diversification Opportunities for SYSTEMAIR and Corsair Gaming

0.47

Correlation Coefficient

SYSTEMAIR  Corsair Gaming

Very weak diversification

The 3 months correlation between SYSTEMAIR and Corsair is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding SYSTEMAIR AB and Corsair Gaming in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Corsair Gaming 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 Corsair Gaming. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Corsair Gaming has no effect on the direction of SYSTEMAIR i.e., SYSTEMAIR and Corsair Gaming go up and down completely randomly.

Pair Corralation between SYSTEMAIR and Corsair Gaming

Assuming the 90 days trading horizon SYSTEMAIR AB is expected to generate 1.05 times more return on investment than Corsair Gaming. However, SYSTEMAIR is 1.05 times more volatile than Corsair Gaming. It trades about 0.06 of its potential returns per unit of risk. Corsair Gaming is currently generating about -0.03 per unit of risk. If you would invest  401.00  in SYSTEMAIR AB on September 2, 2024 and sell it today you would earn a total of  381.00  from holding SYSTEMAIR AB or generate 95.01% return on investment over 90 days.

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

SYSTEMAIR AB  vs.  Corsair Gaming

SYSTEMAIR AB

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in SYSTEMAIR AB are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, SYSTEMAIR reported solid returns over the last few months and may actually be approaching a breakup point.

Corsair Gaming

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Corsair Gaming are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Corsair Gaming reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SYSTEMAIR and Corsair Gaming

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

The idea behind SYSTEMAIR AB and Corsair Gaming 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.