Correlation Between Icelandair Group and Corbion NV
Can any of the company-specific risk be diversified away by investing in both Icelandair Group and Corbion NV 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 Icelandair Group and Corbion NV into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Icelandair Group hf and Corbion NV, you can compare the effects of market volatilities on Icelandair Group and Corbion NV 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 Icelandair Group with a short position of Corbion NV. Check out your portfolio center. Please also check ongoing floating volatility patterns of Icelandair Group and Corbion NV.
Diversification Opportunities for Icelandair Group and Corbion NV
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Icelandair and Corbion is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Icelandair Group hf and Corbion NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Corbion NV and Icelandair Group 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 Icelandair Group hf are associated (or correlated) with Corbion NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Corbion NV has no effect on the direction of Icelandair Group i.e., Icelandair Group and Corbion NV go up and down completely randomly.
Pair Corralation between Icelandair Group and Corbion NV
Assuming the 90 days trading horizon Icelandair Group hf is expected to generate 1.68 times more return on investment than Corbion NV. However, Icelandair Group is 1.68 times more volatile than Corbion NV. It trades about 0.21 of its potential returns per unit of risk. Corbion NV is currently generating about -0.03 per unit of risk. If you would invest 86.00 in Icelandair Group hf on September 2, 2024 and sell it today you would earn a total of 37.00 from holding Icelandair Group hf or generate 43.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Icelandair Group hf vs. Corbion NV
Performance |
| Timeline |
| Icelandair Group |
| Corbion NV |
Icelandair Group and Corbion NV Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Icelandair Group and Corbion NV
The main advantage of trading using opposite Icelandair Group and Corbion NV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Icelandair Group position performs unexpectedly, Corbion NV 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 Corbion NV will offset losses from the drop in Corbion NV's long position.| Icelandair Group vs. slandsbanki hf | Icelandair Group vs. Arion banki hf | Icelandair Group vs. Iceland Seafood International |
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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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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