Correlation Between QLEANAIR and SYSTEMAIR

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

By analyzing existing cross correlation between QLEANAIR AB SK 50 and SYSTEMAIR AB, you can compare the effects of market volatilities on QLEANAIR 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 QLEANAIR with a short position of SYSTEMAIR. Check out your portfolio center. Please also check ongoing floating volatility patterns of QLEANAIR and SYSTEMAIR.

Diversification Opportunities for QLEANAIR and SYSTEMAIR

0.53

Correlation Coefficient

QLEANAIR  SYSTEMAIR

Very weak diversification

The 3 months correlation between QLEANAIR and SYSTEMAIR is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding QLEANAIR AB SK 50 and SYSTEMAIR AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SYSTEMAIR AB and QLEANAIR 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 QLEANAIR AB SK 50 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 QLEANAIR i.e., QLEANAIR and SYSTEMAIR go up and down completely randomly.

Pair Corralation between QLEANAIR and SYSTEMAIR

Assuming the 90 days horizon QLEANAIR AB SK 50 is expected to generate 1.63 times more return on investment than SYSTEMAIR. However, QLEANAIR is 1.63 times more volatile than SYSTEMAIR AB. It trades about 0.18 of its potential returns per unit of risk. SYSTEMAIR AB is currently generating about 0.15 per unit of risk. If you would invest  121.00  in QLEANAIR AB SK 50 on April 24, 2025 and sell it today you would earn a total of  45.00  from holding QLEANAIR AB SK 50 or generate 37.19% return on investment over 90 days.

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

QLEANAIR AB SK 50  vs.  SYSTEMAIR AB

QLEANAIR AB SK

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in QLEANAIR AB SK 50 are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, QLEANAIR reported solid returns over the last few months and may actually be approaching a breakup point.

SYSTEMAIR AB

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in SYSTEMAIR AB are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, SYSTEMAIR reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with QLEANAIR and SYSTEMAIR

The main advantage of trading using opposite QLEANAIR and SYSTEMAIR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if QLEANAIR 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 QLEANAIR AB SK 50 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.