Correlation Between Systemair and Svedbergs

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

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

Diversification Opportunities for Systemair and Svedbergs

-0.26

Correlation Coefficient

Systemair  Svedbergs

Very good diversification

The 3 months correlation between Systemair and Svedbergs is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Systemair AB and Svedbergs i Dalstorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Svedbergs i Dalstorp 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 Svedbergs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Svedbergs i Dalstorp has no effect on the direction of Systemair i.e., Systemair and Svedbergs go up and down completely randomly.

Pair Corralation between Systemair and Svedbergs

Assuming the 90 days trading horizon Systemair AB is expected to under-perform the Svedbergs. In addition to that, Systemair is 1.33 times more volatile than Svedbergs i Dalstorp. It trades about -0.07 of its total potential returns per unit of risk. Svedbergs i Dalstorp is currently generating about 0.18 per unit of volatility. If you would invest  4,180  in Svedbergs i Dalstorp on November 29, 2024 and sell it today you would earn a total of  830.00  from holding Svedbergs i Dalstorp or generate 19.86% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.31%
Values	Daily Returns

Systemair AB  vs.  Svedbergs i Dalstorp

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. 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.

Svedbergs i Dalstorp

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Svedbergs i Dalstorp are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain technical and fundamental indicators, Svedbergs sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Systemair and Svedbergs

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

The idea behind Systemair AB and Svedbergs i Dalstorp 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.