Correlation Between ADRIATIC METALS and AIB Group
Can any of the company-specific risk be diversified away by investing in both ADRIATIC METALS and AIB Group 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 ADRIATIC METALS and AIB Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ADRIATIC METALS LS 013355 and AIB Group plc, you can compare the effects of market volatilities on ADRIATIC METALS and AIB Group 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 ADRIATIC METALS with a short position of AIB Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of ADRIATIC METALS and AIB Group.
Diversification Opportunities for ADRIATIC METALS and AIB Group
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ADRIATIC and AIB is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding ADRIATIC METALS LS 013355 and AIB Group plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AIB Group plc and ADRIATIC METALS 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 ADRIATIC METALS LS 013355 are associated (or correlated) with AIB Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AIB Group plc has no effect on the direction of ADRIATIC METALS i.e., ADRIATIC METALS and AIB Group go up and down completely randomly.
Pair Corralation between ADRIATIC METALS and AIB Group
Assuming the 90 days trading horizon ADRIATIC METALS LS 013355 is expected to generate 2.3 times more return on investment than AIB Group. However, ADRIATIC METALS is 2.3 times more volatile than AIB Group plc. It trades about 0.03 of its potential returns per unit of risk. AIB Group plc is currently generating about -0.1 per unit of risk. If you would invest 240.00 in ADRIATIC METALS LS 013355 on September 22, 2024 and sell it today you would earn a total of 2.00 from holding ADRIATIC METALS LS 013355 or generate 0.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ADRIATIC METALS LS 013355 vs. AIB Group plc
Performance |
| Timeline |
| ADRIATIC METALS LS |
| AIB Group plc |
ADRIATIC METALS and AIB Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ADRIATIC METALS and AIB Group
The main advantage of trading using opposite ADRIATIC METALS and AIB Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ADRIATIC METALS position performs unexpectedly, AIB Group 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 AIB Group will offset losses from the drop in AIB Group's long position.| ADRIATIC METALS vs. Lion Biotechnologies | ADRIATIC METALS vs. Digilife Technologies Limited | ADRIATIC METALS vs. DEVRY EDUCATION GRP | ADRIATIC METALS vs. Grand Canyon Education |
| AIB Group vs. Suntory Beverage Food | AIB Group vs. NorAm Drilling AS | AIB Group vs. DELTA AIR LINES | AIB Group vs. SCANSOURCE |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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