Correlation Between Slandsbanki and Arion Banki
Can any of the company-specific risk be diversified away by investing in both Slandsbanki and Arion 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 Slandsbanki and Arion Banki into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between slandsbanki hf and Arion banki hf, you can compare the effects of market volatilities on Slandsbanki and Arion 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 Slandsbanki with a short position of Arion Banki. Check out your portfolio center. Please also check ongoing floating volatility patterns of Slandsbanki and Arion Banki.
Diversification Opportunities for Slandsbanki and Arion Banki
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Slandsbanki and Arion is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding slandsbanki hf and Arion banki hf in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arion banki hf and Slandsbanki 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 slandsbanki hf are associated (or correlated) with Arion Banki. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arion banki hf has no effect on the direction of Slandsbanki i.e., Slandsbanki and Arion Banki go up and down completely randomly.
Pair Corralation between Slandsbanki and Arion Banki
Assuming the 90 days trading horizon slandsbanki hf is expected to generate 0.98 times more return on investment than Arion Banki. However, slandsbanki hf is 1.02 times less risky than Arion Banki. It trades about 0.17 of its potential returns per unit of risk. Arion banki hf is currently generating about 0.05 per unit of risk. If you would invest 12,100 in slandsbanki hf on August 25, 2024 and sell it today you would earn a total of 475.00 from holding slandsbanki hf or generate 3.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
slandsbanki hf vs. Arion banki hf
Performance |
| Timeline |
| slandsbanki hf |
| Arion banki hf |
Slandsbanki and Arion Banki Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Slandsbanki and Arion Banki
The main advantage of trading using opposite Slandsbanki and Arion Banki positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Slandsbanki position performs unexpectedly, Arion 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 Arion Banki will offset losses from the drop in Arion Banki's long position.| Slandsbanki vs. Alvotech | Slandsbanki vs. Festi hf | Slandsbanki vs. Hagar hf | Slandsbanki vs. Arion banki 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 Anywhere module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Money Managers Screen money managers from public funds and ETFs managed around the world |