Correlation Between IAR Systems and Arion Banki
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By analyzing existing cross correlation between IAR Systems Group and Arion banki hf, you can compare the effects of market volatilities on IAR Systems and Arion Banki 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 IAR Systems with a short position of Arion Banki. Check out your portfolio center. Please also check ongoing floating volatility patterns of IAR Systems and Arion Banki.
Diversification Opportunities for IAR Systems and Arion Banki
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between IAR and Arion is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding IAR Systems Group and Arion banki hf in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arion banki hf and IAR Systems 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 IAR Systems Group are associated (or correlated) with Arion Banki. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arion banki hf has no effect on the direction of IAR Systems i.e., IAR Systems and Arion Banki go up and down completely randomly.
Pair Corralation between IAR Systems and Arion Banki
Assuming the 90 days trading horizon IAR Systems Group is expected to generate 1.46 times more return on investment than Arion Banki. However, IAR Systems is 1.46 times more volatile than Arion banki hf. It trades about 0.05 of its potential returns per unit of risk. Arion banki hf is currently generating about 0.06 per unit of risk. If you would invest 11,869 in IAR Systems Group on September 3, 2024 and sell it today you would earn a total of 2,631 from holding IAR Systems Group or generate 22.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
IAR Systems Group vs. Arion banki hf
Performance |
| Timeline |
| IAR Systems Group |
| Arion banki hf |
IAR Systems and Arion Banki Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IAR Systems and Arion Banki
The main advantage of trading using opposite IAR Systems and Arion Banki positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IAR Systems position performs unexpectedly, Arion Banki 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 Arion Banki will offset losses from the drop in Arion Banki's long position.| IAR Systems vs. CellaVision AB | IAR Systems vs. HMS Networks AB | IAR Systems vs. Enea AB | IAR Systems vs. Know IT AB |
| Arion Banki vs. Atrium Ljungberg AB | Arion Banki vs. Arjo AB | Arion Banki vs. Bravida Holding AB | Arion Banki vs. Avanza Bank Holding |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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