Correlation Between Chocoladefabriken and Bank of Ireland
Can any of the company-specific risk be diversified away by investing in both Chocoladefabriken 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 Chocoladefabriken 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 Chocoladefabriken Lindt Spruengli and Bank of Ireland, you can compare the effects of market volatilities on Chocoladefabriken 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 Chocoladefabriken with a short position of Bank of Ireland. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chocoladefabriken and Bank of Ireland.
Diversification Opportunities for Chocoladefabriken and Bank of Ireland
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Chocoladefabriken and Bank is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Chocoladefabriken Lindt Spruen 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 Chocoladefabriken 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 Chocoladefabriken Lindt Spruengli 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 Chocoladefabriken i.e., Chocoladefabriken and Bank of Ireland go up and down completely randomly.
Pair Corralation between Chocoladefabriken and Bank of Ireland
Assuming the 90 days trading horizon Chocoladefabriken Lindt Spruengli is expected to under-perform the Bank of Ireland. But the stock apears to be less risky and, when comparing its historical volatility, Chocoladefabriken Lindt Spruengli is 2.35 times less risky than Bank of Ireland. The stock trades about -0.01 of its potential returns per unit of risk. The Bank of Ireland is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 736.00 in Bank of Ireland on September 3, 2024 and sell it today you would earn a total of 90.00 from holding Bank of Ireland or generate 12.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 98.8% |
| Values | Daily Returns |
Chocoladefabriken Lindt Spruen vs. Bank of Ireland
Performance |
| Timeline |
| Chocoladefabriken Lindt |
| Bank of Ireland |
Chocoladefabriken and Bank of Ireland Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chocoladefabriken and Bank of Ireland
The main advantage of trading using opposite Chocoladefabriken and Bank of Ireland positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chocoladefabriken 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.| Chocoladefabriken vs. Catalyst Media Group | Chocoladefabriken vs. CATLIN GROUP | Chocoladefabriken vs. RTW Venture Fund | Chocoladefabriken vs. Secure Property Development |
| Bank of Ireland vs. Ally Financial | Bank of Ireland vs. iShares Physical Silver | Bank of Ireland vs. Greenroc Mining PLC | Bank of Ireland vs. Lundin Mining Corp |
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.
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