Correlation Between St Galler and Bank of Ireland
Can any of the company-specific risk be diversified away by investing in both St Galler 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 St Galler 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 St Galler Kantonalbank and Bank of Ireland, you can compare the effects of market volatilities on St Galler 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 St Galler with a short position of Bank of Ireland. Check out your portfolio center. Please also check ongoing floating volatility patterns of St Galler and Bank of Ireland.
Diversification Opportunities for St Galler and Bank of Ireland
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between 0QQZ and Bank is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding St Galler Kantonalbank 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 St Galler 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 St Galler Kantonalbank 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 St Galler i.e., St Galler and Bank of Ireland go up and down completely randomly.
Pair Corralation between St Galler and Bank of Ireland
Assuming the 90 days trading horizon St Galler Kantonalbank is expected to under-perform the Bank of Ireland. But the stock apears to be less risky and, when comparing its historical volatility, St Galler Kantonalbank is 2.97 times less risky than Bank of Ireland. The stock trades about -0.03 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 702.00 in Bank of Ireland on September 2, 2024 and sell it today you would earn a total of 126.00 from holding Bank of Ireland or generate 17.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
St Galler Kantonalbank vs. Bank of Ireland
Performance |
| Timeline |
| St Galler Kantonalbank |
| Bank of Ireland |
St Galler and Bank of Ireland Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with St Galler and Bank of Ireland
The main advantage of trading using opposite St Galler and Bank of Ireland positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if St Galler 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.| St Galler vs. Uniper SE | St Galler vs. Mulberry Group PLC | St Galler vs. London Security Plc | St Galler vs. Triad Group PLC |
| Bank of Ireland vs. SupplyMe Capital PLC | Bank of Ireland vs. Lloyds Banking Group | Bank of Ireland vs. Premier African Minerals | Bank of Ireland vs. SANTANDER UK 8 |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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