Correlation Between Iceland Seafood and Kvika Banki
Can any of the company-specific risk be diversified away by investing in both Iceland Seafood and Kvika Banki 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 Kvika Banki 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 Kvika banki hf, you can compare the effects of market volatilities on Iceland Seafood and Kvika 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 Iceland Seafood with a short position of Kvika Banki. Check out your portfolio center. Please also check ongoing floating volatility patterns of Iceland Seafood and Kvika Banki.
Diversification Opportunities for Iceland Seafood and Kvika Banki
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Iceland and Kvika is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Iceland Seafood International and Kvika banki hf in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kvika banki 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 Kvika Banki. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kvika banki hf has no effect on the direction of Iceland Seafood i.e., Iceland Seafood and Kvika Banki go up and down completely randomly.
Pair Corralation between Iceland Seafood and Kvika Banki
Assuming the 90 days trading horizon Iceland Seafood International is expected to under-perform the Kvika Banki. But the stock apears to be less risky and, when comparing its historical volatility, Iceland Seafood International is 1.05 times less risky than Kvika Banki. The stock trades about -0.07 of its potential returns per unit of risk. The Kvika banki hf is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,400 in Kvika banki hf on August 25, 2024 and sell it today you would earn a total of 460.00 from holding Kvika banki hf or generate 32.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Iceland Seafood International vs. Kvika banki hf
Performance |
| Timeline |
| Iceland Seafood Inte |
| Kvika banki hf |
Iceland Seafood and Kvika Banki Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Iceland Seafood and Kvika Banki
The main advantage of trading using opposite Iceland Seafood and Kvika Banki positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Iceland Seafood position performs unexpectedly, Kvika 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 Kvika Banki will offset losses from the drop in Kvika Banki's long position.| Iceland Seafood vs. Arion banki hf | Iceland Seafood vs. Kvika banki hf | Iceland Seafood vs. slandsbanki hf | Iceland Seafood vs. Alvotech |
| Kvika Banki vs. Alvotech | Kvika Banki vs. Festi hf | Kvika Banki vs. slandsbanki hf | Kvika Banki vs. Hagar 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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