Correlation Between Iceland Seafood and ISFELAG HF
Can any of the company-specific risk be diversified away by investing in both Iceland Seafood and ISFELAG 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 Iceland Seafood and ISFELAG HF into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Iceland Seafood International and ISFELAG HF, you can compare the effects of market volatilities on Iceland Seafood and ISFELAG 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 Iceland Seafood with a short position of ISFELAG HF. Check out your portfolio center. Please also check ongoing floating volatility patterns of Iceland Seafood and ISFELAG HF.
Diversification Opportunities for Iceland Seafood and ISFELAG HF
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Iceland and ISFELAG is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Iceland Seafood International and ISFELAG HF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ISFELAG HF and Iceland Seafood 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 Iceland Seafood International are associated (or correlated) with ISFELAG HF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ISFELAG HF has no effect on the direction of Iceland Seafood i.e., Iceland Seafood and ISFELAG HF go up and down completely randomly.
Pair Corralation between Iceland Seafood and ISFELAG HF
Assuming the 90 days trading horizon Iceland Seafood International is expected to under-perform the ISFELAG HF. In addition to that, Iceland Seafood is 1.85 times more volatile than ISFELAG HF. It trades about -0.13 of its total potential returns per unit of risk. ISFELAG HF is currently generating about 0.04 per unit of volatility. If you would invest 15,200 in ISFELAG HF on August 29, 2024 and sell it today you would earn a total of 80.00 from holding ISFELAG HF or generate 0.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Iceland Seafood International vs. ISFELAG HF
Performance |
| Timeline |
| Iceland Seafood Inte |
| ISFELAG HF |
Iceland Seafood and ISFELAG HF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Iceland Seafood and ISFELAG HF
The main advantage of trading using opposite Iceland Seafood and ISFELAG HF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Iceland Seafood position performs unexpectedly, ISFELAG 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 ISFELAG HF will offset losses from the drop in ISFELAG HF's long position.| Iceland Seafood vs. Alvotech | Iceland Seafood vs. Festi hf | Iceland Seafood vs. slandsbanki hf | Iceland Seafood vs. Hagar hf |
| ISFELAG HF vs. Alvotech | ISFELAG HF vs. Arion banki hf | ISFELAG HF vs. Icelandair Group hf | ISFELAG HF 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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