Correlation Between AIB Group and Tower One
Can any of the company-specific risk be diversified away by investing in both AIB Group and Tower One 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 AIB Group and Tower One into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AIB Group plc and Tower One Wireless, you can compare the effects of market volatilities on AIB Group and Tower One 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 AIB Group with a short position of Tower One. Check out your portfolio center. Please also check ongoing floating volatility patterns of AIB Group and Tower One.
Diversification Opportunities for AIB Group and Tower One
Pay attention - limited upside
The 3 months correlation between AIB and Tower is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding AIB Group plc and Tower One Wireless in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tower One Wireless and AIB Group 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 AIB Group plc are associated (or correlated) with Tower One. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tower One Wireless has no effect on the direction of AIB Group i.e., AIB Group and Tower One go up and down completely randomly.
Pair Corralation between AIB Group and Tower One
If you would invest 531.00 in AIB Group plc on September 12, 2024 and sell it today you would lose (2.00) from holding AIB Group plc or give up 0.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AIB Group plc vs. Tower One Wireless
Performance |
| Timeline |
| AIB Group plc |
| Tower One Wireless |
AIB Group and Tower One Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AIB Group and Tower One
The main advantage of trading using opposite AIB Group and Tower One positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AIB Group position performs unexpectedly, Tower One 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 Tower One will offset losses from the drop in Tower One's long position.| AIB Group vs. Regions Financial | AIB Group vs. JSC Halyk bank | AIB Group vs. Harmony Gold Mining | AIB Group vs. ELMOS SEMICONDUCTOR |
| Tower One vs. Superior Plus Corp | Tower One vs. SIVERS SEMICONDUCTORS AB | Tower One vs. Norsk Hydro ASA | Tower One vs. Reliance Steel Aluminum |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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