Correlation Between Kvika Banki and Vtryggingaflag Slands
Can any of the company-specific risk be diversified away by investing in both Kvika Banki and Vtryggingaflag Slands 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 Vtryggingaflag Slands 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 Vtryggingaflag slands hf, you can compare the effects of market volatilities on Kvika Banki and Vtryggingaflag Slands 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 Vtryggingaflag Slands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kvika Banki and Vtryggingaflag Slands.
Diversification Opportunities for Kvika Banki and Vtryggingaflag Slands
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kvika and Vtryggingaflag is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Kvika banki hf and Vtryggingaflag slands hf in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vtryggingaflag slands 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 Vtryggingaflag Slands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vtryggingaflag slands has no effect on the direction of Kvika Banki i.e., Kvika Banki and Vtryggingaflag Slands go up and down completely randomly.
Pair Corralation between Kvika Banki and Vtryggingaflag Slands
Assuming the 90 days trading horizon Kvika banki hf is expected to under-perform the Vtryggingaflag Slands. But the stock apears to be less risky and, when comparing its historical volatility, Kvika banki hf is 1.25 times less risky than Vtryggingaflag Slands. The stock trades about -0.04 of its potential returns per unit of risk. The Vtryggingaflag slands hf is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 2,020 in Vtryggingaflag slands hf on November 28, 2024 and sell it today you would earn a total of 80.00 from holding Vtryggingaflag slands hf or generate 3.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kvika banki hf vs. Vtryggingaflag slands hf
Performance |
| Timeline |
| Kvika banki hf |
| Vtryggingaflag slands |
Kvika Banki and Vtryggingaflag Slands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kvika Banki and Vtryggingaflag Slands
The main advantage of trading using opposite Kvika Banki and Vtryggingaflag Slands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kvika Banki position performs unexpectedly, Vtryggingaflag Slands 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 Vtryggingaflag Slands will offset losses from the drop in Vtryggingaflag Slands' long position.| Kvika Banki vs. Alvotech | Kvika Banki vs. slandsbanki hf | Kvika Banki vs. Icelandair Group hf | Kvika Banki vs. Fly Play hf |
| Vtryggingaflag Slands vs. Alvotech | Vtryggingaflag Slands vs. Heimar hf | Vtryggingaflag Slands vs. Solid Clouds hf | Vtryggingaflag Slands 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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