Correlation Between ISFELAG HF and Hampidjan
Can any of the company-specific risk be diversified away by investing in both ISFELAG HF and Hampidjan 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 ISFELAG HF and Hampidjan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ISFELAG HF and Hampidjan hf, you can compare the effects of market volatilities on ISFELAG HF and Hampidjan 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 ISFELAG HF with a short position of Hampidjan. Check out your portfolio center. Please also check ongoing floating volatility patterns of ISFELAG HF and Hampidjan.
Diversification Opportunities for ISFELAG HF and Hampidjan
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between ISFELAG and Hampidjan is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding ISFELAG HF and Hampidjan hf in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hampidjan hf and ISFELAG HF 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 ISFELAG HF are associated (or correlated) with Hampidjan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hampidjan hf has no effect on the direction of ISFELAG HF i.e., ISFELAG HF and Hampidjan go up and down completely randomly.
Pair Corralation between ISFELAG HF and Hampidjan
Assuming the 90 days trading horizon ISFELAG HF is expected to generate 0.61 times more return on investment than Hampidjan. However, ISFELAG HF is 1.63 times less risky than Hampidjan. It trades about -0.02 of its potential returns per unit of risk. Hampidjan hf is currently generating about -0.05 per unit of risk. If you would invest 16,131 in ISFELAG HF on August 25, 2024 and sell it today you would lose (731.00) from holding ISFELAG HF or give up 4.53% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 82.29% |
| Values | Daily Returns |
ISFELAG HF vs. Hampidjan hf
Performance |
| Timeline |
| ISFELAG HF |
| Hampidjan hf |
ISFELAG HF and Hampidjan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ISFELAG HF and Hampidjan
The main advantage of trading using opposite ISFELAG HF and Hampidjan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ISFELAG HF position performs unexpectedly, Hampidjan 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 Hampidjan will offset losses from the drop in Hampidjan's long position.| ISFELAG HF vs. Arion banki hf | ISFELAG HF vs. Icelandair Group hf | ISFELAG HF vs. Iceland Seafood International | ISFELAG HF vs. Alvotech |
| Hampidjan vs. Arion banki hf | Hampidjan vs. Flying Nickel Mining | Hampidjan vs. Marel hf | Hampidjan vs. Kvika 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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