Correlation Between Hagar Hf and Festi Hf
Can any of the company-specific risk be diversified away by investing in both Hagar Hf and Festi Hf 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 Hagar Hf and Festi Hf into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hagar hf and Festi hf, you can compare the effects of market volatilities on Hagar Hf and Festi Hf 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 Hagar Hf with a short position of Festi Hf. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hagar Hf and Festi Hf.
Diversification Opportunities for Hagar Hf and Festi Hf
Almost no diversification
The 3 months correlation between Hagar and Festi is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Hagar hf and Festi hf in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Festi hf and Hagar Hf 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 Hagar hf are associated (or correlated) with Festi Hf. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Festi hf has no effect on the direction of Hagar Hf i.e., Hagar Hf and Festi Hf go up and down completely randomly.
Pair Corralation between Hagar Hf and Festi Hf
Assuming the 90 days trading horizon Hagar Hf is expected to generate 1.0 times less return on investment than Festi Hf. In addition to that, Hagar Hf is 1.21 times more volatile than Festi hf. It trades about 0.08 of its total potential returns per unit of risk. Festi hf is currently generating about 0.09 per unit of volatility. If you would invest 18,200 in Festi hf on August 25, 2024 and sell it today you would earn a total of 9,800 from holding Festi hf or generate 53.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hagar hf vs. Festi hf
Performance |
| Timeline |
| Hagar hf |
| Festi hf |
Hagar Hf and Festi Hf Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hagar Hf and Festi Hf
The main advantage of trading using opposite Hagar Hf and Festi Hf positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hagar Hf position performs unexpectedly, Festi Hf 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 Festi Hf will offset losses from the drop in Festi Hf's long position.| Hagar Hf vs. Icelandair Group hf | Hagar Hf vs. Arion banki hf | Hagar Hf vs. Festi hf | Hagar Hf vs. Marel hf |
| Festi Hf vs. Icelandic Salmon AS | Festi Hf vs. lgerin Egill Skallagrmsson | Festi Hf vs. Fly Play hf | Festi Hf vs. Oculis Holding AG |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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