Correlation Between Arion Banki and Oculis Holding
Can any of the company-specific risk be diversified away by investing in both Arion Banki and Oculis Holding 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 Oculis Holding 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 Oculis Holding AG, you can compare the effects of market volatilities on Arion Banki and Oculis Holding 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 Oculis Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arion Banki and Oculis Holding.
Diversification Opportunities for Arion Banki and Oculis Holding
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Arion and Oculis is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Arion banki hf and Oculis Holding AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oculis Holding AG 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 Oculis Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oculis Holding AG has no effect on the direction of Arion Banki i.e., Arion Banki and Oculis Holding go up and down completely randomly.
Pair Corralation between Arion Banki and Oculis Holding
Assuming the 90 days trading horizon Arion Banki is expected to generate 3.02 times less return on investment than Oculis Holding. But when comparing it to its historical volatility, Arion banki hf is 2.23 times less risky than Oculis Holding. It trades about 0.13 of its potential returns per unit of risk. Oculis Holding AG is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 167,000 in Oculis Holding AG on September 3, 2024 and sell it today you would earn a total of 55,000 from holding Oculis Holding AG or generate 32.93% 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. Oculis Holding AG
Performance |
| Timeline |
| Arion banki hf |
| Oculis Holding AG |
Arion Banki and Oculis Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arion Banki and Oculis Holding
The main advantage of trading using opposite Arion Banki and Oculis Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arion Banki position performs unexpectedly, Oculis Holding 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 Oculis Holding will offset losses from the drop in Oculis Holding's long position.| Arion Banki vs. Alvotech | Arion Banki vs. Sminn hf | Arion Banki vs. Festi hf | Arion Banki vs. slandsbanki hf |
| Oculis Holding vs. Alvotech | Oculis Holding vs. Sminn hf | Oculis Holding vs. Festi hf | Oculis Holding vs. slandsbanki hf |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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