Correlation Between Slandsbanki and Hagar Hf
Can any of the company-specific risk be diversified away by investing in both Slandsbanki and Hagar 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 Slandsbanki and Hagar Hf into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between slandsbanki hf and Hagar hf, you can compare the effects of market volatilities on Slandsbanki and Hagar 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 Slandsbanki with a short position of Hagar Hf. Check out your portfolio center. Please also check ongoing floating volatility patterns of Slandsbanki and Hagar Hf.
Diversification Opportunities for Slandsbanki and Hagar Hf
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Slandsbanki and Hagar is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding slandsbanki hf and Hagar hf in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hagar 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 Hagar Hf. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hagar hf has no effect on the direction of Slandsbanki i.e., Slandsbanki and Hagar Hf go up and down completely randomly.
Pair Corralation between Slandsbanki and Hagar Hf
Assuming the 90 days trading horizon slandsbanki hf is expected to under-perform the Hagar Hf. But the stock apears to be less risky and, when comparing its historical volatility, slandsbanki hf is 1.42 times less risky than Hagar Hf. The stock trades about -0.09 of its potential returns per unit of risk. The Hagar hf is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 9,325 in Hagar hf on August 28, 2024 and sell it today you would earn a total of 100.00 from holding Hagar hf or generate 1.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
slandsbanki hf vs. Hagar hf
Performance |
| Timeline |
| slandsbanki hf |
| Hagar hf |
Slandsbanki and Hagar Hf Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Slandsbanki and Hagar Hf
The main advantage of trading using opposite Slandsbanki and Hagar Hf positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Slandsbanki position performs unexpectedly, Hagar 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 Hagar Hf will offset losses from the drop in Hagar Hf's long position.| Slandsbanki vs. Icelandair Group hf | Slandsbanki vs. Arion banki hf | Slandsbanki vs. Kvika banki hf | Slandsbanki vs. Marel hf |
| Hagar Hf vs. Icelandair Group hf | Hagar Hf vs. Arion banki hf | Hagar Hf vs. Festi hf | Hagar Hf vs. Marel 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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