Correlation Between Arion Banki and BoMill AB
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By analyzing existing cross correlation between Arion banki hf and BoMill AB, you can compare the effects of market volatilities on Arion Banki and BoMill AB 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 BoMill AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arion Banki and BoMill AB.
Diversification Opportunities for Arion Banki and BoMill AB
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Arion and BoMill is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Arion banki hf and BoMill AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BoMill 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 BoMill AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BoMill AB has no effect on the direction of Arion Banki i.e., Arion Banki and BoMill AB go up and down completely randomly.
Pair Corralation between Arion Banki and BoMill AB
Assuming the 90 days trading horizon Arion Banki is expected to generate 1.81 times less return on investment than BoMill AB. But when comparing it to its historical volatility, Arion banki hf is 2.2 times less risky than BoMill AB. It trades about 0.1 of its potential returns per unit of risk. BoMill AB is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 100.00 in BoMill AB on August 30, 2024 and sell it today you would earn a total of 34.00 from holding BoMill AB or generate 34.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Arion banki hf vs. BoMill AB
Performance |
| Timeline |
| Arion banki hf |
| BoMill AB |
Arion Banki and BoMill AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arion Banki and BoMill AB
The main advantage of trading using opposite Arion Banki and BoMill AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arion Banki position performs unexpectedly, BoMill AB 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 BoMill AB will offset losses from the drop in BoMill AB'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 |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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