Correlation Between Kvika Banki and Oculis Holding
Can any of the company-specific risk be diversified away by investing in both Kvika Banki 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 Kvika Banki and Oculis Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kvika banki hf and Oculis Holding AG, you can compare the effects of market volatilities on Kvika Banki 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 Kvika Banki with a short position of Oculis Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kvika Banki and Oculis Holding.
Diversification Opportunities for Kvika Banki and Oculis Holding
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Kvika and Oculis is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Kvika banki 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 Kvika Banki 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 Kvika banki 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 Kvika Banki i.e., Kvika Banki and Oculis Holding go up and down completely randomly.
Pair Corralation between Kvika Banki and Oculis Holding
Assuming the 90 days trading horizon Kvika Banki is expected to generate 2.12 times less return on investment than Oculis Holding. But when comparing it to its historical volatility, Kvika banki hf is 2.57 times less risky than Oculis Holding. It trades about 0.21 of its potential returns per unit of risk. Oculis Holding AG is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 167,000 in Oculis Holding AG on September 3, 2024 and sell it today you would earn a total of 55,000 from holding Oculis Holding AG or generate 32.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kvika banki hf vs. Oculis Holding AG
Performance |
| Timeline |
| Kvika banki hf |
| Oculis Holding AG |
Kvika Banki and Oculis Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kvika Banki and Oculis Holding
The main advantage of trading using opposite Kvika Banki and Oculis Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kvika Banki 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.The idea behind Kvika banki hf and Oculis Holding AG pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Oculis Holding vs. Alvotech | Oculis Holding vs. Sminn hf | Oculis Holding vs. Festi 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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