Correlation Between Marel Hf and Slandsbanki
Can any of the company-specific risk be diversified away by investing in both Marel Hf and Slandsbanki 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 Marel Hf and Slandsbanki into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Marel hf and slandsbanki hf, you can compare the effects of market volatilities on Marel Hf and Slandsbanki 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 Marel Hf with a short position of Slandsbanki. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marel Hf and Slandsbanki.
Diversification Opportunities for Marel Hf and Slandsbanki
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Marel and Slandsbanki is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Marel hf and slandsbanki hf in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on slandsbanki hf and Marel 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 Marel hf are associated (or correlated) with Slandsbanki. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of slandsbanki hf has no effect on the direction of Marel Hf i.e., Marel Hf and Slandsbanki go up and down completely randomly.
Pair Corralation between Marel Hf and Slandsbanki
Assuming the 90 days trading horizon Marel hf is expected to generate 0.91 times more return on investment than Slandsbanki. However, Marel hf is 1.1 times less risky than Slandsbanki. It trades about 0.25 of its potential returns per unit of risk. slandsbanki hf is currently generating about 0.17 per unit of risk. If you would invest 57,600 in Marel hf on August 25, 2024 and sell it today you would earn a total of 3,100 from holding Marel hf or generate 5.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Marel hf vs. slandsbanki hf
Performance |
| Timeline |
| Marel hf |
| slandsbanki hf |
Marel Hf and Slandsbanki Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Marel Hf and Slandsbanki
The main advantage of trading using opposite Marel Hf and Slandsbanki positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marel Hf position performs unexpectedly, Slandsbanki 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 Slandsbanki will offset losses from the drop in Slandsbanki's long position.| Marel Hf vs. Iceland Seafood International | Marel Hf vs. Kvika banki hf | Marel Hf vs. Arion banki hf | Marel Hf vs. Alvotech |
| Slandsbanki vs. Alvotech | Slandsbanki vs. Festi hf | Slandsbanki vs. Hagar hf | Slandsbanki vs. Arion 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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