Correlation Between Team and System1

Can any of the company-specific risk be diversified away by investing in both Team and System1 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 Team and System1 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Team Inc and System1, you can compare the effects of market volatilities on Team and System1 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 Team with a short position of System1. Check out your portfolio center. Please also check ongoing floating volatility patterns of Team and System1.

Diversification Opportunities for Team and System1

-0.45

Correlation Coefficient

Team  System1

Very good diversification

The 3 months correlation between Team and System1 is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Team Inc and System1 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on System1 and Team 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 Team Inc are associated (or correlated) with System1. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of System1 has no effect on the direction of Team i.e., Team and System1 go up and down completely randomly.

Pair Corralation between Team and System1

Given the investment horizon of 90 days Team Inc is expected to under-perform the System1. But the stock apears to be less risky and, when comparing its historical volatility, Team Inc is 3.25 times less risky than System1. The stock trades about -0.05 of its potential returns per unit of risk. The System1 is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  407.00  in System1 on May 8, 2025 and sell it today you would earn a total of  136.00  from holding System1 or generate 33.42% return on investment over 90 days.

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

Team Inc  vs.  System1

Team Inc

Risk-Adjusted Performance

Weakest

Over the last 90 days Team Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

System1

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in System1 are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating basic indicators, System1 unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Team and System1

The main advantage of trading using opposite Team and System1 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Team position performs unexpectedly, System1 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 System1 will offset losses from the drop in System1's long position.

The idea behind Team Inc and System1 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..