Correlation Between Evolution and Systemair

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

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

Diversification Opportunities for Evolution and Systemair

-0.34

Correlation Coefficient

Evolution  Systemair

Very good diversification

The 3 months correlation between Evolution and Systemair is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Evolution AB and Systemair AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Systemair AB and Evolution 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 Evolution AB 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 Evolution i.e., Evolution and Systemair go up and down completely randomly.

Pair Corralation between Evolution and Systemair

Assuming the 90 days trading horizon Evolution AB is expected to under-perform the Systemair. But the stock apears to be less risky and, when comparing its historical volatility, Evolution AB is 1.02 times less risky than Systemair. The stock trades about -0.05 of its potential returns per unit of risk. The Systemair AB is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  8,810  in Systemair AB on September 23, 2024 and sell it today you would earn a total of  130.00  from holding Systemair AB or generate 1.48% return on investment over 90 days.

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

Evolution AB  vs.  Systemair AB

Evolution AB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Evolution AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

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. In spite of comparatively stable basic indicators, Systemair is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Evolution and Systemair

The main advantage of trading using opposite Evolution and Systemair positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Evolution 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 Evolution AB 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.