Correlation Between SYSTEMAIR and VELA TECHNOLPLC

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

By analyzing existing cross correlation between SYSTEMAIR AB and VELA TECHNOLPLC LS 0001, you can compare the effects of market volatilities on SYSTEMAIR and VELA TECHNOLPLC 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 VELA TECHNOLPLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of SYSTEMAIR and VELA TECHNOLPLC.

Diversification Opportunities for SYSTEMAIR and VELA TECHNOLPLC

0.0

Correlation Coefficient

SYSTEMAIR  VELA TECHNOLPLC

Pay attention - limited upside

The 3 months correlation between SYSTEMAIR and VELA is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding SYSTEMAIR AB and VELA TECHNOLPLC LS 0001 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VELA TECHNOLPLC LS 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 VELA TECHNOLPLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VELA TECHNOLPLC LS has no effect on the direction of SYSTEMAIR i.e., SYSTEMAIR and VELA TECHNOLPLC go up and down completely randomly.

Pair Corralation between SYSTEMAIR and VELA TECHNOLPLC

If you would invest  699.00  in SYSTEMAIR AB on October 6, 2024 and sell it today you would earn a total of  71.00  from holding SYSTEMAIR AB or generate 10.16% return on investment over 90 days.

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

SYSTEMAIR AB  vs.  VELA TECHNOLPLC LS 0001

SYSTEMAIR AB

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in SYSTEMAIR AB are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, SYSTEMAIR is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

VELA TECHNOLPLC LS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days VELA TECHNOLPLC LS 0001 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, VELA TECHNOLPLC is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with SYSTEMAIR and VELA TECHNOLPLC

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

The idea behind SYSTEMAIR AB and VELA TECHNOLPLC LS 0001 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.