Correlation Between Arion Banki and ALM Equity
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By analyzing existing cross correlation between Arion banki hf and ALM Equity AB, you can compare the effects of market volatilities on Arion Banki and ALM Equity 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 Arion Banki with a short position of ALM Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arion Banki and ALM Equity.
Diversification Opportunities for Arion Banki and ALM Equity
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Arion and ALM is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Arion banki hf and ALM Equity AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ALM Equity AB and Arion Banki 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 Arion banki hf are associated (or correlated) with ALM Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ALM Equity AB has no effect on the direction of Arion Banki i.e., Arion Banki and ALM Equity go up and down completely randomly.
Pair Corralation between Arion Banki and ALM Equity
Assuming the 90 days trading horizon Arion banki hf is expected to generate 1.63 times more return on investment than ALM Equity. However, Arion Banki is 1.63 times more volatile than ALM Equity AB. It trades about 0.15 of its potential returns per unit of risk. ALM Equity AB is currently generating about -0.3 per unit of risk. If you would invest 1,215 in Arion banki hf on September 14, 2024 and sell it today you would earn a total of 45.00 from holding Arion banki hf or generate 3.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Arion banki hf vs. ALM Equity AB
Performance |
| Timeline |
| Arion banki hf |
| ALM Equity AB |
Arion Banki and ALM Equity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arion Banki and ALM Equity
The main advantage of trading using opposite Arion Banki and ALM Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arion Banki position performs unexpectedly, ALM Equity 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 ALM Equity will offset losses from the drop in ALM Equity's long position.| Arion Banki vs. Atrium Ljungberg AB | Arion Banki vs. Bravida Holding AB | Arion Banki vs. Avanza Bank Holding | Arion Banki vs. Autoliv |
| ALM Equity vs. Fabege AB | ALM Equity vs. Castellum AB | ALM Equity vs. Wallenstam AB | ALM Equity vs. Fastighets AB Balder |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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