Correlation Between Arion Banki and Lucara Diamond
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By analyzing existing cross correlation between Arion banki hf and Lucara Diamond Corp, you can compare the effects of market volatilities on Arion Banki and Lucara Diamond 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 Lucara Diamond. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arion Banki and Lucara Diamond.
Diversification Opportunities for Arion Banki and Lucara Diamond
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Arion and Lucara is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Arion banki hf and Lucara Diamond Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lucara Diamond Corp 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 Lucara Diamond. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lucara Diamond Corp has no effect on the direction of Arion Banki i.e., Arion Banki and Lucara Diamond go up and down completely randomly.
Pair Corralation between Arion Banki and Lucara Diamond
Assuming the 90 days trading horizon Arion banki hf is expected to generate 0.52 times more return on investment than Lucara Diamond. However, Arion banki hf is 1.92 times less risky than Lucara Diamond. It trades about 0.21 of its potential returns per unit of risk. Lucara Diamond Corp is currently generating about -0.2 per unit of risk. If you would invest 1,210 in Arion banki hf on October 26, 2024 and sell it today you would earn a total of 140.00 from holding Arion banki hf or generate 11.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 97.44% |
| Values | Daily Returns |
Arion banki hf vs. Lucara Diamond Corp
Performance |
| Timeline |
| Arion banki hf |
| Lucara Diamond Corp |
Arion Banki and Lucara Diamond Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arion Banki and Lucara Diamond
The main advantage of trading using opposite Arion Banki and Lucara Diamond positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arion Banki position performs unexpectedly, Lucara Diamond 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 Lucara Diamond will offset losses from the drop in Lucara Diamond'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 |
| Lucara Diamond vs. Africa Oil Corp | Lucara Diamond vs. Lundin Gold | Lucara Diamond vs. Lundin Mining | Lucara Diamond vs. Inwido AB |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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