Correlation Between Slandsbanki and ISFELAG HF
Can any of the company-specific risk be diversified away by investing in both Slandsbanki 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 Slandsbanki and ISFELAG 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 ISFELAG HF, you can compare the effects of market volatilities on Slandsbanki 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 Slandsbanki with a short position of ISFELAG HF. Check out your portfolio center. Please also check ongoing floating volatility patterns of Slandsbanki and ISFELAG HF.
Diversification Opportunities for Slandsbanki and ISFELAG HF
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Slandsbanki and ISFELAG is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding slandsbanki hf and ISFELAG HF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ISFELAG 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 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 Slandsbanki i.e., Slandsbanki and ISFELAG HF go up and down completely randomly.
Pair Corralation between Slandsbanki and ISFELAG HF
Assuming the 90 days trading horizon slandsbanki hf is expected to generate 1.64 times more return on investment than ISFELAG HF. However, Slandsbanki is 1.64 times more volatile than ISFELAG HF. It trades about 0.02 of its potential returns per unit of risk. ISFELAG HF is currently generating about -0.03 per unit of risk. If you would invest 11,779 in slandsbanki hf on November 19, 2024 and sell it today you would earn a total of 821.00 from holding slandsbanki hf or generate 6.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 59.67% |
| Values | Daily Returns |
slandsbanki hf vs. ISFELAG HF
Performance |
| Timeline |
| slandsbanki hf |
| ISFELAG HF |
Slandsbanki and ISFELAG HF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Slandsbanki and ISFELAG HF
The main advantage of trading using opposite Slandsbanki and ISFELAG HF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Slandsbanki 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.| Slandsbanki vs. Icelandair Group hf | Slandsbanki vs. Arion banki hf | Slandsbanki vs. Kvika banki hf | Slandsbanki vs. Sildarvinnslan Hf |
| ISFELAG HF vs. Alvotech | ISFELAG HF vs. Heimar hf | ISFELAG HF vs. Solid Clouds hf | ISFELAG HF vs. Sminn 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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