Correlation Between Lgerin Egill and Slandsbanki
Can any of the company-specific risk be diversified away by investing in both Lgerin Egill 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 Lgerin Egill and Slandsbanki into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between lgerin Egill Skallagrmsson and slandsbanki hf, you can compare the effects of market volatilities on Lgerin Egill 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 Lgerin Egill with a short position of Slandsbanki. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lgerin Egill and Slandsbanki.
Diversification Opportunities for Lgerin Egill and Slandsbanki
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Lgerin and Slandsbanki is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding lgerin Egill Skallagrmsson and slandsbanki hf in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on slandsbanki hf and Lgerin Egill 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 lgerin Egill Skallagrmsson 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 Lgerin Egill i.e., Lgerin Egill and Slandsbanki go up and down completely randomly.
Pair Corralation between Lgerin Egill and Slandsbanki
Assuming the 90 days trading horizon Lgerin Egill is expected to generate 2.15 times less return on investment than Slandsbanki. In addition to that, Lgerin Egill is 1.02 times more volatile than slandsbanki hf. It trades about 0.08 of its total potential returns per unit of risk. slandsbanki hf is currently generating about 0.17 per unit of volatility. If you would invest 12,100 in slandsbanki hf on August 25, 2024 and sell it today you would earn a total of 475.00 from holding slandsbanki hf or generate 3.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
lgerin Egill Skallagrmsson vs. slandsbanki hf
Performance |
| Timeline |
| lgerin Egill Skallag |
| slandsbanki hf |
Lgerin Egill and Slandsbanki Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lgerin Egill and Slandsbanki
The main advantage of trading using opposite Lgerin Egill and Slandsbanki positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lgerin Egill 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.| Lgerin Egill vs. Arion banki hf | Lgerin Egill vs. Iceland Seafood International | Lgerin Egill vs. Kvika banki hf |
| 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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