Correlation Between Skel Fjrfestingaflag and Iceland Seafood

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

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

Diversification Opportunities for Skel Fjrfestingaflag and Iceland Seafood

0.76

Correlation Coefficient

Skel Fjrfestingaflag  Iceland Seafood

Poor diversification

The 3 months correlation between Skel and Iceland is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Skel fjrfestingaflag hf and Iceland Seafood International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Iceland Seafood Inte and Skel Fjrfestingaflag 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 Skel fjrfestingaflag hf are associated (or correlated) with Iceland Seafood. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Iceland Seafood Inte has no effect on the direction of Skel Fjrfestingaflag i.e., Skel Fjrfestingaflag and Iceland Seafood go up and down completely randomly.

Pair Corralation between Skel Fjrfestingaflag and Iceland Seafood

Assuming the 90 days trading horizon Skel fjrfestingaflag hf is expected to generate 0.51 times more return on investment than Iceland Seafood. However, Skel fjrfestingaflag hf is 1.95 times less risky than Iceland Seafood. It trades about 0.53 of its potential returns per unit of risk. Iceland Seafood International is currently generating about 0.23 per unit of risk. If you would invest  1,750  in Skel fjrfestingaflag hf on October 9, 2024 and sell it today you would earn a total of  195.00  from holding Skel fjrfestingaflag hf or generate 11.14% return on investment over 90 days.

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

Skel fjrfestingaflag hf  vs.  Iceland Seafood International

Skel fjrfestingaflag

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Skel fjrfestingaflag hf are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound fundamental indicators, Skel Fjrfestingaflag is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Iceland Seafood Inte

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Iceland Seafood International has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong technical and fundamental indicators, Iceland Seafood is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Skel Fjrfestingaflag and Iceland Seafood

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

The idea behind Skel fjrfestingaflag hf and Iceland Seafood International 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.