Correlation Between GomSpace Group and Systemair

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

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

Diversification Opportunities for GomSpace Group and Systemair

-0.6

Correlation Coefficient

GomSpace Group  Systemair

Excellent diversification

The 3 months correlation between GomSpace and Systemair is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding GomSpace Group AB and Systemair AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Systemair AB and GomSpace Group 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 GomSpace Group 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 GomSpace Group i.e., GomSpace Group and Systemair go up and down completely randomly.

Pair Corralation between GomSpace Group and Systemair

Assuming the 90 days trading horizon GomSpace Group AB is expected to generate 2.64 times more return on investment than Systemair. However, GomSpace Group is 2.64 times more volatile than Systemair AB. It trades about 0.09 of its potential returns per unit of risk. Systemair AB is currently generating about 0.07 per unit of risk. If you would invest  632.00  in GomSpace Group AB on February 3, 2025 and sell it today you would earn a total of  107.00  from holding GomSpace Group AB or generate 16.93% return on investment over 90 days.

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

GomSpace Group AB  vs.  Systemair AB

GomSpace Group AB

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in GomSpace Group AB are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, GomSpace Group unveiled solid returns over the last few months and may actually be approaching a breakup point.

Systemair AB

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Systemair AB are ranked lower than 1 (%) 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 GomSpace Group and Systemair

The main advantage of trading using opposite GomSpace Group and Systemair positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GomSpace Group 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 GomSpace Group 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.