Correlation Between Arion Banki and Gaming Corps

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Can any of the company-specific risk be diversified away by investing in both Arion Banki and Gaming Corps 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 Arion Banki and Gaming Corps into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Arion banki hf and Gaming Corps AB, you can compare the effects of market volatilities on Arion Banki and Gaming Corps 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 Gaming Corps. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arion Banki and Gaming Corps.

Diversification Opportunities for Arion Banki and Gaming Corps

-0.86
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Arion and Gaming is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding Arion banki hf and Gaming Corps AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gaming Corps 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 Gaming Corps. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gaming Corps AB has no effect on the direction of Arion Banki i.e., Arion Banki and Gaming Corps go up and down completely randomly.

Pair Corralation between Arion Banki and Gaming Corps

Assuming the 90 days trading horizon Arion Banki is expected to generate 6.12 times less return on investment than Gaming Corps. But when comparing it to its historical volatility, Arion banki hf is 5.08 times less risky than Gaming Corps. It trades about 0.08 of its potential returns per unit of risk. Gaming Corps AB is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  61.00  in Gaming Corps AB on September 3, 2024 and sell it today you would earn a total of  6.00  from holding Gaming Corps AB or generate 9.84% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Arion banki hf  vs.  Gaming Corps AB

 Performance 
       Timeline  
Arion banki hf 

Risk-Adjusted Performance

12 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Arion banki hf are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Arion Banki unveiled solid returns over the last few months and may actually be approaching a breakup point.
Gaming Corps AB 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Gaming Corps AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak 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.

Arion Banki and Gaming Corps Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Arion Banki and Gaming Corps

The main advantage of trading using opposite Arion Banki and Gaming Corps positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arion Banki position performs unexpectedly, Gaming Corps 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 Gaming Corps will offset losses from the drop in Gaming Corps' long position.
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The idea behind Arion banki hf and Gaming Corps 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.

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