Correlation Between Hagar Hf and Slandsbanki

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

By analyzing existing cross correlation between Hagar hf and slandsbanki hf, you can compare the effects of market volatilities on Hagar 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 Hagar Hf with a short position of Slandsbanki. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hagar Hf and Slandsbanki.

Diversification Opportunities for Hagar Hf and Slandsbanki

0.27

Correlation Coefficient

Hagar Hf  Slandsbanki

Modest diversification

The 3 months correlation between Hagar and Slandsbanki is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Hagar hf and slandsbanki hf in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on slandsbanki hf and Hagar 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 Hagar 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 Hagar Hf i.e., Hagar Hf and Slandsbanki go up and down completely randomly.

Pair Corralation between Hagar Hf and Slandsbanki

Assuming the 90 days trading horizon Hagar hf is expected to generate 0.87 times more return on investment than Slandsbanki. However, Hagar hf is 1.15 times less risky than Slandsbanki. It trades about -0.01 of its potential returns per unit of risk. slandsbanki hf is currently generating about -0.04 per unit of risk. If you would invest  10,300  in Hagar hf on December 2, 2024 and sell it today you would lose (100.00) from holding Hagar hf or give up 0.97% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Hagar hf  vs.  slandsbanki hf

Hagar hf

Risk-Adjusted Performance

Very Weak

Over the last 90 days Hagar hf has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental indicators, Hagar Hf is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

slandsbanki hf

Risk-Adjusted Performance

Very Weak

Over the last 90 days slandsbanki hf has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental drivers, Slandsbanki is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Hagar Hf and Slandsbanki

The main advantage of trading using opposite Hagar Hf and Slandsbanki positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hagar 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.

The idea behind Hagar hf and slandsbanki hf 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.