Correlation Between Systemair and FM Mattsson

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

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

Diversification Opportunities for Systemair and FM Mattsson

0.18

Correlation Coefficient

Systemair  FM Mattsson

Average diversification

The 3 months correlation between Systemair and FMM-B is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Systemair AB and FM Mattsson Mora in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FM Mattsson Mora 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 FM Mattsson. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FM Mattsson Mora has no effect on the direction of Systemair i.e., Systemair and FM Mattsson go up and down completely randomly.

Pair Corralation between Systemair and FM Mattsson

Assuming the 90 days trading horizon Systemair AB is expected to generate 1.15 times more return on investment than FM Mattsson. However, Systemair is 1.15 times more volatile than FM Mattsson Mora. It trades about 0.07 of its potential returns per unit of risk. FM Mattsson Mora is currently generating about 0.0 per unit of risk. If you would invest  7,278  in Systemair AB on September 24, 2024 and sell it today you would earn a total of  1,662  from holding Systemair AB or generate 22.84% return on investment over 90 days.

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

Systemair AB  vs.  FM Mattsson Mora

Systemair AB

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Systemair AB are ranked lower than 2 (%) 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.

FM Mattsson Mora

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days FM Mattsson Mora has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, FM Mattsson 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 Systemair and FM Mattsson

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

The idea behind Systemair AB and FM Mattsson Mora 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 Commodity Directory module to find actively traded commodities issued by global exchanges.