Correlation Between AB Volvo and Arion Banki
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By analyzing existing cross correlation between AB Volvo and Arion banki hf, you can compare the effects of market volatilities on AB Volvo and Arion Banki 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 AB Volvo with a short position of Arion Banki. Check out your portfolio center. Please also check ongoing floating volatility patterns of AB Volvo and Arion Banki.
Diversification Opportunities for AB Volvo and Arion Banki
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between VOLV-B and Arion is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding AB Volvo and Arion banki hf in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arion banki hf and AB Volvo 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 AB Volvo are associated (or correlated) with Arion Banki. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arion banki hf has no effect on the direction of AB Volvo i.e., AB Volvo and Arion Banki go up and down completely randomly.
Pair Corralation between AB Volvo and Arion Banki
Assuming the 90 days trading horizon AB Volvo is expected to generate 0.83 times more return on investment than Arion Banki. However, AB Volvo is 1.2 times less risky than Arion Banki. It trades about 0.07 of its potential returns per unit of risk. Arion banki hf is currently generating about 0.01 per unit of risk. If you would invest 17,610 in AB Volvo on August 27, 2024 and sell it today you would earn a total of 9,540 from holding AB Volvo or generate 54.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AB Volvo vs. Arion banki hf
Performance |
| Timeline |
| AB Volvo |
| Arion banki hf |
AB Volvo and Arion Banki Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AB Volvo and Arion Banki
The main advantage of trading using opposite AB Volvo and Arion Banki positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AB Volvo position performs unexpectedly, Arion Banki 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 Arion Banki will offset losses from the drop in Arion Banki's long position.| AB Volvo vs. AstraZeneca PLC | AB Volvo vs. H M Hennes | AB Volvo vs. Telefonaktiebolaget LM Ericsson | AB Volvo vs. Investor AB ser |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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