Correlation Between Sminn Hf and Skel Fjrfestingaflag

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

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

Diversification Opportunities for Sminn Hf and Skel Fjrfestingaflag

-0.47

Correlation Coefficient

Sminn Hf  Skel Fjrfestingaflag

Very good diversification

The 3 months correlation between Sminn and Skel is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Sminn hf and Skel fjrfestingaflag hf in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Skel fjrfestingaflag and Sminn 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 Sminn hf are associated (or correlated) with Skel Fjrfestingaflag. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Skel fjrfestingaflag has no effect on the direction of Sminn Hf i.e., Sminn Hf and Skel Fjrfestingaflag go up and down completely randomly.

Pair Corralation between Sminn Hf and Skel Fjrfestingaflag

Assuming the 90 days trading horizon Sminn hf is expected to generate 0.8 times more return on investment than Skel Fjrfestingaflag. However, Sminn hf is 1.25 times less risky than Skel Fjrfestingaflag. It trades about 0.07 of its potential returns per unit of risk. Skel fjrfestingaflag hf is currently generating about -0.1 per unit of risk. If you would invest  1,350  in Sminn hf on December 29, 2024 and sell it today you would earn a total of  80.00  from holding Sminn hf or generate 5.93% return on investment over 90 days.

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

Sminn hf  vs.  Skel fjrfestingaflag hf

Sminn hf

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Sminn hf are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong primary indicators, Sminn Hf is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Skel fjrfestingaflag

Risk-Adjusted Performance

Very Weak

Over the last 90 days Skel fjrfestingaflag hf has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with Sminn Hf and Skel Fjrfestingaflag

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

The idea behind Sminn hf and Skel fjrfestingaflag 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.