Correlation Between EVN AG and SYSTEMAIR

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

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

Diversification Opportunities for EVN AG and SYSTEMAIR

-0.04

Correlation Coefficient

EVN AG  SYSTEMAIR

Good diversification

The 3 months correlation between EVN and SYSTEMAIR is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding EVN AG and SYSTEMAIR AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SYSTEMAIR AB and EVN AG 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 EVN AG 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 EVN AG i.e., EVN AG and SYSTEMAIR go up and down completely randomly.

Pair Corralation between EVN AG and SYSTEMAIR

Assuming the 90 days horizon EVN AG is expected to generate 0.7 times more return on investment than SYSTEMAIR. However, EVN AG is 1.43 times less risky than SYSTEMAIR. It trades about 0.11 of its potential returns per unit of risk. SYSTEMAIR AB is currently generating about -0.01 per unit of risk. If you would invest  2,053  in EVN AG on December 22, 2024 and sell it today you would earn a total of  182.00  from holding EVN AG or generate 8.87% return on investment over 90 days.

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

EVN AG  vs.  SYSTEMAIR AB

EVN AG

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in EVN AG are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, EVN AG may actually be approaching a critical reversion point that can send shares even higher in April 2025.

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. 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.

Pair Trading with EVN AG and SYSTEMAIR

The main advantage of trading using opposite EVN AG and SYSTEMAIR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EVN AG 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 EVN AG 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.