Correlation Between SYSTEMAIR and Stockland

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

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

Diversification Opportunities for SYSTEMAIR and Stockland

-0.16

Correlation Coefficient

SYSTEMAIR  Stockland

Good diversification

The 3 months correlation between SYSTEMAIR and Stockland is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding SYSTEMAIR AB and Stockland in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stockland 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 Stockland. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stockland has no effect on the direction of SYSTEMAIR i.e., SYSTEMAIR and Stockland go up and down completely randomly.

Pair Corralation between SYSTEMAIR and Stockland

Assuming the 90 days trading horizon SYSTEMAIR AB is expected to generate 1.64 times more return on investment than Stockland. However, SYSTEMAIR is 1.64 times more volatile than Stockland. It trades about 0.01 of its potential returns per unit of risk. Stockland is currently generating about 0.02 per unit of risk. If you would invest  713.00  in SYSTEMAIR AB on October 25, 2024 and sell it today you would earn a total of  1.00  from holding SYSTEMAIR AB or generate 0.14% 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.  Stockland

SYSTEMAIR AB

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in SYSTEMAIR AB are ranked lower than 1 (%) 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 newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Stockland

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Stockland are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Stockland 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 Stockland

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

The idea behind SYSTEMAIR AB and Stockland 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.