Correlation Between Sn Hf and Kvika Banki

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

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

Diversification Opportunities for Sn Hf and Kvika Banki

-0.45

Correlation Coefficient

Sn Hf  Kvika Banki

Very good diversification

The 3 months correlation between SYN and Kvika is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Sn hf and Kvika banki hf in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kvika banki hf and Sn 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 Sn hf are associated (or correlated) with Kvika Banki. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kvika banki hf has no effect on the direction of Sn Hf i.e., Sn Hf and Kvika Banki go up and down completely randomly.

Pair Corralation between Sn Hf and Kvika Banki

Assuming the 90 days trading horizon Sn hf is expected to under-perform the Kvika Banki. In addition to that, Sn Hf is 2.75 times more volatile than Kvika banki hf. It trades about -0.24 of its total potential returns per unit of risk. Kvika banki hf is currently generating about 0.11 per unit of volatility. If you would invest  1,895  in Kvika banki hf on December 4, 2024 and sell it today you would earn a total of  125.00  from holding Kvika banki hf or generate 6.6% return on investment over 90 days.

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

Sn hf  vs.  Kvika banki hf

Sn hf

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sn hf has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Kvika banki hf

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Kvika banki hf are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite fairly unsteady forward indicators, Kvika Banki may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Sn Hf and Kvika Banki

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

The idea behind Sn hf and Kvika banki 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.

Check out your portfolio center.

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 Bonds Directory module to find actively traded corporate debentures issued by US companies.