Correlation Between Trainline Plc and Systemair

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

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

Diversification Opportunities for Trainline Plc and Systemair

-0.48

Correlation Coefficient

Trainline Plc  Systemair

Very good diversification

The 3 months correlation between Trainline and Systemair is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Trainline Plc and Systemair AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Systemair AB and Trainline Plc 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 Trainline Plc 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 Trainline Plc i.e., Trainline Plc and Systemair go up and down completely randomly.

Pair Corralation between Trainline Plc and Systemair

Assuming the 90 days trading horizon Trainline Plc is expected to under-perform the Systemair. In addition to that, Trainline Plc is 1.18 times more volatile than Systemair AB. It trades about -0.03 of its total potential returns per unit of risk. Systemair AB is currently generating about 0.17 per unit of volatility. If you would invest  7,710  in Systemair AB on April 24, 2025 and sell it today you would earn a total of  1,570  from holding Systemair AB or generate 20.36% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	96.88%
Values	Daily Returns

Trainline Plc  vs.  Systemair AB

Trainline Plc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Trainline Plc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Trainline Plc is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Systemair AB

Risk-Adjusted Performance

Good

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

Pair Trading with Trainline Plc and Systemair

The main advantage of trading using opposite Trainline Plc and Systemair positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Trainline Plc 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 Trainline Plc 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.

Check out your portfolio center.

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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.