Correlation Between Systemair and Genovis AB

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

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

Diversification Opportunities for Systemair and Genovis AB

0.59

Correlation Coefficient

Systemair  Genovis AB

Very weak diversification

The 3 months correlation between Systemair and Genovis is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Systemair AB and Genovis AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genovis AB 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 Genovis AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genovis AB has no effect on the direction of Systemair i.e., Systemair and Genovis AB go up and down completely randomly.

Pair Corralation between Systemair and Genovis AB

Assuming the 90 days trading horizon Systemair AB is expected to generate 0.6 times more return on investment than Genovis AB. However, Systemair AB is 1.66 times less risky than Genovis AB. It trades about 0.03 of its potential returns per unit of risk. Genovis AB is currently generating about -0.02 per unit of risk. If you would invest  7,246  in Systemair AB on October 10, 2024 and sell it today you would earn a total of  1,564  from holding Systemair AB or generate 21.58% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	99.8%
Values	Daily Returns

Systemair AB  vs.  Genovis AB

Systemair AB

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Systemair AB are ranked lower than 3 (%) 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.

Genovis AB

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Genovis AB are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Genovis AB may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Systemair and Genovis AB

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

The idea behind Systemair AB and Genovis 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.