Correlation Between Autoliv and Arion Banki
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By analyzing existing cross correlation between Autoliv and Arion banki hf, you can compare the effects of market volatilities on Autoliv and Arion Banki 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 Autoliv with a short position of Arion Banki. Check out your portfolio center. Please also check ongoing floating volatility patterns of Autoliv and Arion Banki.
Diversification Opportunities for Autoliv and Arion Banki
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Autoliv and Arion is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Autoliv and Arion banki hf in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arion banki hf and Autoliv 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 Autoliv are associated (or correlated) with Arion Banki. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arion banki hf has no effect on the direction of Autoliv i.e., Autoliv and Arion Banki go up and down completely randomly.
Pair Corralation between Autoliv and Arion Banki
Assuming the 90 days trading horizon Autoliv is expected to generate 0.86 times more return on investment than Arion Banki. However, Autoliv is 1.16 times less risky than Arion Banki. It trades about 0.15 of its potential returns per unit of risk. Arion banki hf is currently generating about 0.12 per unit of risk. If you would invest 103,040 in Autoliv on August 29, 2024 and sell it today you would earn a total of 5,560 from holding Autoliv or generate 5.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Autoliv vs. Arion banki hf
Performance |
| Timeline |
| Autoliv |
| Arion banki hf |
Autoliv and Arion Banki Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Autoliv and Arion Banki
The main advantage of trading using opposite Autoliv and Arion Banki positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Autoliv position performs unexpectedly, Arion Banki 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 Arion Banki will offset losses from the drop in Arion Banki's long position.The idea behind Autoliv and Arion banki hf 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.| Arion Banki vs. Atrium Ljungberg AB | Arion Banki vs. Bravida Holding AB | Arion Banki vs. Avanza Bank Holding | Arion Banki vs. Autoliv |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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