Correlation Between Arion Banki and Lipum AB
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By analyzing existing cross correlation between Arion banki hf and Lipum AB, you can compare the effects of market volatilities on Arion Banki and Lipum 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 Lipum AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arion Banki and Lipum AB.
Diversification Opportunities for Arion Banki and Lipum AB
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Arion and Lipum is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Arion banki hf and Lipum AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lipum 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 Lipum AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lipum AB has no effect on the direction of Arion Banki i.e., Arion Banki and Lipum AB go up and down completely randomly.
Pair Corralation between Arion Banki and Lipum AB
Assuming the 90 days trading horizon Arion banki hf is expected to generate 0.39 times more return on investment than Lipum AB. However, Arion banki hf is 2.59 times less risky than Lipum AB. It trades about 0.18 of its potential returns per unit of risk. Lipum AB is currently generating about -0.02 per unit of risk. If you would invest 1,260 in Arion banki hf on November 2, 2024 and sell it today you would earn a total of 115.00 from holding Arion banki hf or generate 9.13% 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. Lipum AB
Performance |
| Timeline |
| Arion banki hf |
| Lipum AB |
Arion Banki and Lipum AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arion Banki and Lipum AB
The main advantage of trading using opposite Arion Banki and Lipum AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arion Banki position performs unexpectedly, Lipum 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 Lipum AB will offset losses from the drop in Lipum AB's long position.| Arion Banki vs. Atrium Ljungberg AB | Arion Banki vs. Arjo AB | Arion Banki vs. Bravida Holding AB | Arion Banki vs. Avanza Bank Holding |
| Lipum AB vs. Ascelia Pharma AB | Lipum AB vs. NextCell Pharma AB | Lipum AB vs. Annexin Pharmaceuticals AB | Lipum AB vs. AlzeCure Pharma |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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