Correlation Between Seche Environnement and Bank of Ireland
Can any of the company-specific risk be diversified away by investing in both Seche Environnement and Bank of Ireland 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 Seche Environnement and Bank of Ireland into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Seche Environnement SA and Bank of Ireland, you can compare the effects of market volatilities on Seche Environnement and Bank of Ireland 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 Seche Environnement with a short position of Bank of Ireland. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seche Environnement and Bank of Ireland.
Diversification Opportunities for Seche Environnement and Bank of Ireland
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Seche and Bank is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Seche Environnement SA and Bank of Ireland in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank of Ireland and Seche Environnement 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 Seche Environnement SA are associated (or correlated) with Bank of Ireland. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank of Ireland has no effect on the direction of Seche Environnement i.e., Seche Environnement and Bank of Ireland go up and down completely randomly.
Pair Corralation between Seche Environnement and Bank of Ireland
Assuming the 90 days trading horizon Seche Environnement is expected to generate 1.36 times less return on investment than Bank of Ireland. In addition to that, Seche Environnement is 1.75 times more volatile than Bank of Ireland. It trades about 0.15 of its total potential returns per unit of risk. Bank of Ireland is currently generating about 0.36 per unit of volatility. If you would invest 876.00 in Bank of Ireland on November 9, 2024 and sell it today you would earn a total of 105.00 from holding Bank of Ireland or generate 11.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Seche Environnement SA vs. Bank of Ireland
Performance |
| Timeline |
| Seche Environnement |
| Bank of Ireland |
Seche Environnement and Bank of Ireland Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Seche Environnement and Bank of Ireland
The main advantage of trading using opposite Seche Environnement and Bank of Ireland positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seche Environnement position performs unexpectedly, Bank of Ireland 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 Bank of Ireland will offset losses from the drop in Bank of Ireland's long position.| Seche Environnement vs. SMA Solar Technology | Seche Environnement vs. Verizon Communications | Seche Environnement vs. Sabien Technology Group | Seche Environnement vs. Gamma Communications PLC |
| Bank of Ireland vs. Associated British Foods | Bank of Ireland vs. Tyson Foods Cl | Bank of Ireland vs. Wyndham Hotels Resorts | Bank of Ireland vs. Bell Food Group |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated |