Correlation Between Sn Hf and Lgerin Egill

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

By analyzing existing cross correlation between Sn hf and lgerin Egill Skallagrmsson, you can compare the effects of market volatilities on Sn Hf and Lgerin Egill 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 Lgerin Egill. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sn Hf and Lgerin Egill.

Diversification Opportunities for Sn Hf and Lgerin Egill

0.15

Correlation Coefficient

Sn Hf  Lgerin Egill

Average diversification

The 3 months correlation between SYN and Lgerin is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Sn hf and lgerin Egill Skallagrmsson in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on lgerin Egill Skallag 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 Lgerin Egill. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of lgerin Egill Skallag has no effect on the direction of Sn Hf i.e., Sn Hf and Lgerin Egill go up and down completely randomly.

Pair Corralation between Sn Hf and Lgerin Egill

Assuming the 90 days trading horizon Sn hf is expected to under-perform the Lgerin Egill. In addition to that, Sn Hf is 3.01 times more volatile than lgerin Egill Skallagrmsson. It trades about 0.0 of its total potential returns per unit of risk. lgerin Egill Skallagrmsson is currently generating about -0.01 per unit of volatility. If you would invest  1,870  in lgerin Egill Skallagrmsson on December 29, 2024 and sell it today you would lose (20.00) from holding lgerin Egill Skallagrmsson or give up 1.07% of portfolio value over 90 days.

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

Sn hf  vs.  lgerin Egill Skallagrmsson

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.

lgerin Egill Skallag

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Sn Hf and Lgerin Egill

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

The idea behind Sn hf and lgerin Egill Skallagrmsson 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.