Correlation Between Arion Banki and Gadsden Properties

Can any of the company-specific risk be diversified away by investing in both Arion Banki and Gadsden Properties 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 Arion Banki and Gadsden Properties into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Arion banki hf and Gadsden Properties, you can compare the effects of market volatilities on Arion Banki and Gadsden Properties 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 Arion Banki with a short position of Gadsden Properties. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arion Banki and Gadsden Properties.

Diversification Opportunities for Arion Banki and Gadsden Properties

0.33

Correlation Coefficient

Arion Banki  Gadsden Properties

Weak diversification

The 3 months correlation between Arion and Gadsden is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Arion banki hf and Gadsden Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gadsden Properties and Arion 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 Arion banki hf are associated (or correlated) with Gadsden Properties. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gadsden Properties has no effect on the direction of Arion Banki i.e., Arion Banki and Gadsden Properties go up and down completely randomly.

Pair Corralation between Arion Banki and Gadsden Properties

If you would invest  16,650  in Arion banki hf on October 22, 2024 and sell it today you would earn a total of  100.00  from holding Arion banki hf or generate 0.6% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	6.25%
Values	Daily Returns

Arion banki hf  vs.  Gadsden Properties

Arion banki hf

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Arion banki hf are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite fairly unsteady forward indicators, Arion Banki may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Gadsden Properties

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Gadsden Properties has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable fundamental indicators, Gadsden Properties is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Arion Banki and Gadsden Properties

The main advantage of trading using opposite Arion Banki and Gadsden Properties positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arion Banki position performs unexpectedly, Gadsden Properties 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 Gadsden Properties will offset losses from the drop in Gadsden Properties' long position.

The idea behind Arion banki hf and Gadsden Properties pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.