Correlation Between SaveLend Group and Arion Banki

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

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

Diversification Opportunities for SaveLend Group and Arion Banki

-0.44

Correlation Coefficient

SaveLend Group  Arion Banki

Very good diversification

The 3 months correlation between SaveLend and Arion is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding SaveLend Group AB and Arion banki hf in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arion banki hf and SaveLend Group 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 SaveLend Group AB are associated (or correlated) with Arion Banki. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arion banki hf has no effect on the direction of SaveLend Group i.e., SaveLend Group and Arion Banki go up and down completely randomly.

Pair Corralation between SaveLend Group and Arion Banki

Assuming the 90 days trading horizon SaveLend Group AB is expected to under-perform the Arion Banki. In addition to that, SaveLend Group is 2.07 times more volatile than Arion banki hf. It trades about -0.22 of its total potential returns per unit of risk. Arion banki hf is currently generating about 0.04 per unit of volatility. If you would invest  1,260  in Arion banki hf on December 1, 2024 and sell it today you would earn a total of  35.00  from holding Arion banki hf or generate 2.78% return on investment over 90 days.

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

SaveLend Group AB  vs.  Arion banki hf

SaveLend Group AB

Risk-Adjusted Performance

Very Weak

Over the last 90 days SaveLend Group AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Arion banki hf

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Arion banki hf are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Arion Banki is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with SaveLend Group and Arion Banki

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

The idea behind SaveLend Group AB and Arion 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.