Correlation Between National Atomic and Systemair

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

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

Diversification Opportunities for National Atomic and Systemair

0.14

Correlation Coefficient

National Atomic  Systemair

Average diversification

The 3 months correlation between National and Systemair is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding National Atomic Co and Systemair AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Systemair AB and National Atomic 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 National Atomic Co 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 National Atomic i.e., National Atomic and Systemair go up and down completely randomly.

Pair Corralation between National Atomic and Systemair

Assuming the 90 days trading horizon National Atomic Co is expected to under-perform the Systemair. But the stock apears to be less risky and, when comparing its historical volatility, National Atomic Co is 1.67 times less risky than Systemair. The stock trades about -0.06 of its potential returns per unit of risk. The Systemair AB is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  8,201  in Systemair AB on October 23, 2024 and sell it today you would lose (31.00) from holding Systemair AB or give up 0.38% of portfolio value over 90 days.

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

National Atomic Co  vs.  Systemair AB

National Atomic

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days National Atomic Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, National Atomic is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Systemair AB

Risk-Adjusted Performance

0 of 100

Modest

Over the last 90 days Systemair AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Systemair is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with National Atomic and Systemair

The main advantage of trading using opposite National Atomic and Systemair positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Atomic 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 National Atomic Co 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.