Correlation Between Slandsbanki and Oculis Holding
Can any of the company-specific risk be diversified away by investing in both Slandsbanki and Oculis Holding 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 Oculis Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between slandsbanki hf and Oculis Holding AG, you can compare the effects of market volatilities on Slandsbanki and Oculis Holding 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 Oculis Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Slandsbanki and Oculis Holding.
Diversification Opportunities for Slandsbanki and Oculis Holding
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Slandsbanki and Oculis is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding slandsbanki hf and Oculis Holding AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oculis Holding AG 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 Oculis Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oculis Holding AG has no effect on the direction of Slandsbanki i.e., Slandsbanki and Oculis Holding go up and down completely randomly.
Pair Corralation between Slandsbanki and Oculis Holding
Assuming the 90 days trading horizon Slandsbanki is expected to generate 5.29 times less return on investment than Oculis Holding. But when comparing it to its historical volatility, slandsbanki hf is 1.36 times less risky than Oculis Holding. It trades about 0.02 of its potential returns per unit of risk. Oculis Holding AG is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 169,000 in Oculis Holding AG on September 4, 2024 and sell it today you would earn a total of 41,000 from holding Oculis Holding AG or generate 24.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 41.55% |
| Values | Daily Returns |
slandsbanki hf vs. Oculis Holding AG
Performance |
| Timeline |
| slandsbanki hf |
| Oculis Holding AG |
Slandsbanki and Oculis Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Slandsbanki and Oculis Holding
The main advantage of trading using opposite Slandsbanki and Oculis Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Slandsbanki position performs unexpectedly, Oculis Holding 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 Oculis Holding will offset losses from the drop in Oculis Holding's long position.| Slandsbanki vs. Icelandair Group hf | Slandsbanki vs. Arion banki hf | Slandsbanki vs. Kvika banki hf | Slandsbanki vs. Marel hf |
| Oculis Holding vs. Iceland Seafood International | Oculis Holding vs. Icelandair Group hf | Oculis Holding 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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