Correlation Between Icelandic Salmon and Oculis Holding

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

By analyzing existing cross correlation between Icelandic Salmon AS and Oculis Holding AG, you can compare the effects of market volatilities on Icelandic Salmon and Oculis Holding 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 Icelandic Salmon with a short position of Oculis Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Icelandic Salmon and Oculis Holding.

Diversification Opportunities for Icelandic Salmon and Oculis Holding

-0.71

Correlation Coefficient

Icelandic Salmon  Oculis Holding

Pay attention - limited upside

The 3 months correlation between Icelandic and Oculis is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Icelandic Salmon AS and Oculis Holding AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oculis Holding AG and Icelandic Salmon 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 Icelandic Salmon AS are associated (or correlated) with Oculis Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oculis Holding AG has no effect on the direction of Icelandic Salmon i.e., Icelandic Salmon and Oculis Holding go up and down completely randomly.

Pair Corralation between Icelandic Salmon and Oculis Holding

Assuming the 90 days trading horizon Icelandic Salmon AS is expected to under-perform the Oculis Holding. But the stock apears to be less risky and, when comparing its historical volatility, Icelandic Salmon AS is 2.54 times less risky than Oculis Holding. The stock trades about -0.09 of its potential returns per unit of risk. The Oculis Holding AG is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  213,000  in Oculis Holding AG on December 3, 2024 and sell it today you would earn a total of  63,000  from holding Oculis Holding AG or generate 29.58% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.33%
Values	Daily Returns

Icelandic Salmon AS  vs.  Oculis Holding AG

Icelandic Salmon

Risk-Adjusted Performance

Very Weak

Over the last 90 days Icelandic Salmon AS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong forward indicators, Icelandic Salmon is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Oculis Holding AG

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Oculis Holding AG are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of rather inconsistent basic indicators, Oculis Holding exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Icelandic Salmon and Oculis Holding

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

The idea behind Icelandic Salmon AS and Oculis Holding AG 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.