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

-0.24

Correlation Coefficient

Sn Hf  Kvika Banki

Very good diversification

The 3 months correlation between SYN and Kvika is -0.24. 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 generate 1.1 times more return on investment than Kvika Banki. However, Sn Hf is 1.1 times more volatile than Kvika banki hf. It trades about 0.0 of its potential returns per unit of risk. Kvika banki hf is currently generating about -0.11 per unit of risk. If you would invest  3,220  in Sn hf on December 28, 2024 and sell it today you would lose (160.00) from holding Sn hf or give up 4.97% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
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 rather sound basic indicators, Sn Hf is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Kvika banki hf

Risk-Adjusted Performance

Very Weak

Over the last 90 days Kvika banki hf has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's forward indicators remain fairly strong which may send shares a bit higher in April 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

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.

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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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.