Correlation Between G5 Entertainment and Bank of Ireland
Can any of the company-specific risk be diversified away by investing in both G5 Entertainment 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 G5 Entertainment 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 G5 Entertainment AB and Bank of Ireland, you can compare the effects of market volatilities on G5 Entertainment 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 G5 Entertainment with a short position of Bank of Ireland. Check out your portfolio center. Please also check ongoing floating volatility patterns of G5 Entertainment and Bank of Ireland.
Diversification Opportunities for G5 Entertainment and Bank of Ireland
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between 0QUS and Bank is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding G5 Entertainment AB 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 G5 Entertainment 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 G5 Entertainment AB 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 G5 Entertainment i.e., G5 Entertainment and Bank of Ireland go up and down completely randomly.
Pair Corralation between G5 Entertainment and Bank of Ireland
Assuming the 90 days trading horizon G5 Entertainment AB is expected to under-perform the Bank of Ireland. In addition to that, G5 Entertainment is 1.08 times more volatile than Bank of Ireland. It trades about -0.04 of its total potential returns per unit of risk. Bank of Ireland is currently generating about 0.01 per unit of volatility. If you would invest 841.00 in Bank of Ireland on August 31, 2024 and sell it today you would lose (9.00) from holding Bank of Ireland or give up 1.07% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
G5 Entertainment AB vs. Bank of Ireland
Performance |
| Timeline |
| G5 Entertainment |
| Bank of Ireland |
G5 Entertainment and Bank of Ireland Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with G5 Entertainment and Bank of Ireland
The main advantage of trading using opposite G5 Entertainment and Bank of Ireland positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if G5 Entertainment 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.| G5 Entertainment vs. Neometals | G5 Entertainment vs. Coor Service Management | G5 Entertainment vs. Aeorema Communications Plc | G5 Entertainment vs. JLEN Environmental Assets |
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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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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