Correlation Between Iceland Seafood and Origo Hf

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

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

Diversification Opportunities for Iceland Seafood and Origo Hf

0.0

Correlation Coefficient

Iceland Seafood  Origo Hf

Pay attention - limited upside

The 3 months correlation between Iceland and Origo is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Iceland Seafood International and Origo Hf in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Origo Hf and Iceland Seafood 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 Iceland Seafood International are associated (or correlated) with Origo Hf. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Origo Hf has no effect on the direction of Iceland Seafood i.e., Iceland Seafood and Origo Hf go up and down completely randomly.

Pair Corralation between Iceland Seafood and Origo Hf

If you would invest  462.00  in Iceland Seafood International on December 4, 2024 and sell it today you would earn a total of  73.00  from holding Iceland Seafood International or generate 15.8% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Iceland Seafood International  vs.  Origo Hf

Iceland Seafood Inte

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Iceland Seafood International are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak technical and fundamental indicators, Iceland Seafood sustained solid returns over the last few months and may actually be approaching a breakup point.

Origo Hf

Risk-Adjusted Performance

Very Weak

Over the last 90 days Origo Hf has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical and fundamental indicators, Origo Hf is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Iceland Seafood and Origo Hf

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

The idea behind Iceland Seafood International and Origo 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.