Correlation Between Iceland Seafood and Skel Fjrfestingaflag
Can any of the company-specific risk be diversified away by investing in both Iceland Seafood and Skel Fjrfestingaflag 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 Skel Fjrfestingaflag 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 Skel fjrfestingaflag hf, you can compare the effects of market volatilities on Iceland Seafood and Skel Fjrfestingaflag 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 Skel Fjrfestingaflag. Check out your portfolio center. Please also check ongoing floating volatility patterns of Iceland Seafood and Skel Fjrfestingaflag.
Diversification Opportunities for Iceland Seafood and Skel Fjrfestingaflag
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Iceland and Skel is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Iceland Seafood International and Skel fjrfestingaflag hf in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Skel fjrfestingaflag 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 Skel Fjrfestingaflag. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Skel fjrfestingaflag has no effect on the direction of Iceland Seafood i.e., Iceland Seafood and Skel Fjrfestingaflag go up and down completely randomly.
Pair Corralation between Iceland Seafood and Skel Fjrfestingaflag
Assuming the 90 days trading horizon Iceland Seafood International is expected to under-perform the Skel Fjrfestingaflag. But the stock apears to be less risky and, when comparing its historical volatility, Iceland Seafood International is 1.52 times less risky than Skel Fjrfestingaflag. The stock trades about -0.1 of its potential returns per unit of risk. The Skel fjrfestingaflag hf is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,540 in Skel fjrfestingaflag hf on September 3, 2024 and sell it today you would earn a total of 90.00 from holding Skel fjrfestingaflag hf or generate 5.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Iceland Seafood International vs. Skel fjrfestingaflag hf
Performance |
| Timeline |
| Iceland Seafood Inte |
| Skel fjrfestingaflag |
Iceland Seafood and Skel Fjrfestingaflag Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Iceland Seafood and Skel Fjrfestingaflag
The main advantage of trading using opposite Iceland Seafood and Skel Fjrfestingaflag positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Iceland Seafood position performs unexpectedly, Skel Fjrfestingaflag 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 Skel Fjrfestingaflag will offset losses from the drop in Skel Fjrfestingaflag's long position.| Iceland Seafood vs. Arion banki hf | Iceland Seafood vs. Alvotech | Iceland Seafood vs. Icelandair Group hf | Iceland Seafood vs. Kvika banki hf |
| Skel Fjrfestingaflag vs. Icelandair Group hf | Skel Fjrfestingaflag vs. Kvika banki hf | Skel Fjrfestingaflag vs. Iceland Seafood International | Skel Fjrfestingaflag 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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