Correlation Between Skel Fjrfestingaflag and Sminn Hf

Can any of the company-specific risk be diversified away by investing in both Skel Fjrfestingaflag and Sminn 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 Skel Fjrfestingaflag and Sminn Hf 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 Sminn hf, you can compare the effects of market volatilities on Skel Fjrfestingaflag and Sminn 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 Skel Fjrfestingaflag with a short position of Sminn Hf. Check out your portfolio center. Please also check ongoing floating volatility patterns of Skel Fjrfestingaflag and Sminn Hf.

Diversification Opportunities for Skel Fjrfestingaflag and Sminn Hf

-0.49

Correlation Coefficient

Skel Fjrfestingaflag  Sminn Hf

Very good diversification

The 3 months correlation between Skel and Sminn is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Skel fjrfestingaflag hf and Sminn hf in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sminn hf 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 Sminn Hf. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sminn hf has no effect on the direction of Skel Fjrfestingaflag i.e., Skel Fjrfestingaflag and Sminn Hf go up and down completely randomly.

Pair Corralation between Skel Fjrfestingaflag and Sminn Hf

Assuming the 90 days trading horizon Skel Fjrfestingaflag is expected to generate 4.82 times less return on investment than Sminn Hf. In addition to that, Skel Fjrfestingaflag is 1.43 times more volatile than Sminn hf. It trades about 0.06 of its total potential returns per unit of risk. Sminn hf is currently generating about 0.43 per unit of volatility. If you would invest  1,210  in Sminn hf on September 13, 2024 and sell it today you would earn a total of  165.00  from holding Sminn hf or generate 13.64% return on investment over 90 days.

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

Skel fjrfestingaflag hf  vs.  Sminn hf

Skel fjrfestingaflag

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Skel fjrfestingaflag hf are ranked lower than 3 (%) 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.

Sminn hf

Risk-Adjusted Performance

31 of 100

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Sminn hf are ranked lower than 31 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unsteady primary indicators, Sminn Hf sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Skel Fjrfestingaflag and Sminn Hf

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

The idea behind Skel fjrfestingaflag hf and Sminn 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.