Correlation Between Icelandair Group and IMCD NV
Can any of the company-specific risk be diversified away by investing in both Icelandair Group and IMCD 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 IMCD 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 IMCD NV, you can compare the effects of market volatilities on Icelandair Group and IMCD 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 IMCD NV. Check out your portfolio center. Please also check ongoing floating volatility patterns of Icelandair Group and IMCD NV.
Diversification Opportunities for Icelandair Group and IMCD NV
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Icelandair and IMCD is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Icelandair Group hf and IMCD NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IMCD 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 IMCD NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IMCD NV has no effect on the direction of Icelandair Group i.e., Icelandair Group and IMCD NV go up and down completely randomly.
Pair Corralation between Icelandair Group and IMCD NV
Assuming the 90 days trading horizon Icelandair Group hf is expected to generate 1.26 times more return on investment than IMCD NV. However, Icelandair Group is 1.26 times more volatile than IMCD NV. It trades about 0.26 of its potential returns per unit of risk. IMCD NV is currently generating about -0.09 per unit of risk. If you would invest 107.00 in Icelandair Group hf on August 31, 2024 and sell it today you would earn a total of 16.00 from holding Icelandair Group hf or generate 14.95% 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. IMCD NV
Performance |
| Timeline |
| Icelandair Group |
| IMCD NV |
Icelandair Group and IMCD NV Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Icelandair Group and IMCD NV
The main advantage of trading using opposite Icelandair Group and IMCD NV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Icelandair Group position performs unexpectedly, IMCD 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 IMCD NV will offset losses from the drop in IMCD NV's long position.| Icelandair Group vs. Alvotech | Icelandair Group vs. Sminn hf | Icelandair Group vs. Festi hf | Icelandair Group vs. slandsbanki hf |
| IMCD NV vs. Wolters Kluwer NV | IMCD NV vs. Aalberts Industries NV | IMCD NV vs. ASM International NV | IMCD NV vs. ASR Nederland NV |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
Other Complementary Tools
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators |