Correlation Between Fly Play and Icelandair Group
Can any of the company-specific risk be diversified away by investing in both Fly Play and Icelandair Group 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 Fly Play and Icelandair Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fly Play hf and Icelandair Group hf, you can compare the effects of market volatilities on Fly Play and Icelandair Group 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 Fly Play with a short position of Icelandair Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fly Play and Icelandair Group.
Diversification Opportunities for Fly Play and Icelandair Group
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Fly and Icelandair is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Fly Play hf and Icelandair Group hf in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Icelandair Group and Fly Play 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 Fly Play hf are associated (or correlated) with Icelandair Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Icelandair Group has no effect on the direction of Fly Play i.e., Fly Play and Icelandair Group go up and down completely randomly.
Pair Corralation between Fly Play and Icelandair Group
Assuming the 90 days trading horizon Fly Play hf is expected to under-perform the Icelandair Group. In addition to that, Fly Play is 1.2 times more volatile than Icelandair Group hf. It trades about -0.03 of its total potential returns per unit of risk. Icelandair Group hf is currently generating about 0.26 per unit of volatility. If you would invest 107.00 in Icelandair Group hf on August 31, 2024 and sell it today you would earn a total of 16.00 from holding Icelandair Group hf or generate 14.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fly Play hf vs. Icelandair Group hf
Performance |
| Timeline |
| Fly Play hf |
| Icelandair Group |
Fly Play and Icelandair Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fly Play and Icelandair Group
The main advantage of trading using opposite Fly Play and Icelandair Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fly Play position performs unexpectedly, Icelandair Group 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 Icelandair Group will offset losses from the drop in Icelandair Group's long position.| Fly Play vs. slandsbanki hf | Fly Play vs. Icelandair Group hf | Fly Play vs. Marel hf | Fly Play vs. Arion banki hf |
| Icelandair Group vs. Alvotech | Icelandair Group vs. Sminn hf | Icelandair Group vs. Festi hf | Icelandair Group 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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