Correlation Between Batm Advanced and Systemair

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

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

Diversification Opportunities for Batm Advanced and Systemair

0.05

Correlation Coefficient

Batm Advanced  Systemair

Significant diversification

The 3 months correlation between Batm and Systemair is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Batm Advanced Communications and Systemair AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Systemair AB and Batm Advanced 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 Batm Advanced Communications are associated (or correlated) with Systemair. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Systemair AB has no effect on the direction of Batm Advanced i.e., Batm Advanced and Systemair go up and down completely randomly.

Pair Corralation between Batm Advanced and Systemair

Assuming the 90 days trading horizon Batm Advanced Communications is expected to under-perform the Systemair. In addition to that, Batm Advanced is 1.31 times more volatile than Systemair AB. It trades about -0.01 of its total potential returns per unit of risk. Systemair AB is currently generating about 0.04 per unit of volatility. If you would invest  6,859  in Systemair AB on September 1, 2024 and sell it today you would earn a total of  2,351  from holding Systemair AB or generate 34.28% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	99.01%
Values	Daily Returns

Batm Advanced Communications  vs.  Systemair AB

Batm Advanced Commun

Risk-Adjusted Performance

0 of 100

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 uncertain performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in December 2024. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Systemair AB

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Systemair AB are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Systemair unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Batm Advanced and Systemair

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

The idea behind Batm Advanced Communications and Systemair AB 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.