Correlation Between Upsales Technology and Systemair

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

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

Diversification Opportunities for Upsales Technology and Systemair

-0.36

Correlation Coefficient

Upsales Technology  Systemair

Very good diversification

The 3 months correlation between Upsales and Systemair is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Upsales Technology AB and Systemair AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Systemair AB and Upsales Technology 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 Upsales Technology 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 Upsales Technology i.e., Upsales Technology and Systemair go up and down completely randomly.

Pair Corralation between Upsales Technology and Systemair

Assuming the 90 days trading horizon Upsales Technology is expected to generate 1.7 times less return on investment than Systemair. In addition to that, Upsales Technology is 1.13 times more volatile than Systemair AB. It trades about 0.04 of its total potential returns per unit of risk. Systemair AB is currently generating about 0.08 per unit of volatility. If you would invest  8,270  in Systemair AB on October 9, 2024 and sell it today you would earn a total of  600.00  from holding Systemair AB or generate 7.26% return on investment over 90 days.

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

Upsales Technology AB  vs.  Systemair AB

Upsales Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Upsales Technology AB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Upsales Technology is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

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.

Pair Trading with Upsales Technology and Systemair

The main advantage of trading using opposite Upsales Technology and Systemair positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Upsales Technology 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 Upsales Technology 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.