Correlation Between Fulcrum Metals and Systemair

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

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

Diversification Opportunities for Fulcrum Metals and Systemair

-0.29

Correlation Coefficient

Fulcrum Metals  Systemair

Very good diversification

The 3 months correlation between Fulcrum and Systemair is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Fulcrum Metals PLC and Systemair AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Systemair AB and Fulcrum Metals 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 Fulcrum Metals 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 Fulcrum Metals i.e., Fulcrum Metals and Systemair go up and down completely randomly.

Pair Corralation between Fulcrum Metals and Systemair

Assuming the 90 days trading horizon Fulcrum Metals PLC is expected to under-perform the Systemair. In addition to that, Fulcrum Metals is 1.09 times more volatile than Systemair AB. It trades about -0.15 of its total potential returns per unit of risk. Systemair AB is currently generating about 0.11 per unit of volatility. If you would invest  8,530  in Systemair AB on September 14, 2024 and sell it today you would earn a total of  1,210  from holding Systemair AB or generate 14.19% return on investment over 90 days.

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

Fulcrum Metals PLC  vs.  Systemair AB

Fulcrum Metals PLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fulcrum Metals PLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Systemair AB

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Systemair AB are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Systemair unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Fulcrum Metals and Systemair

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

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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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.