Correlation Between Alpha Bank and Bank of Ireland
Can any of the company-specific risk be diversified away by investing in both Alpha Bank 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 Alpha Bank 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 Alpha Bank SA and Bank of Ireland, you can compare the effects of market volatilities on Alpha Bank 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 Alpha Bank with a short position of Bank of Ireland. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alpha Bank and Bank of Ireland.
Diversification Opportunities for Alpha Bank and Bank of Ireland
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Alpha and Bank is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Alpha Bank SA 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 Alpha Bank 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 Alpha Bank SA 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 Alpha Bank i.e., Alpha Bank and Bank of Ireland go up and down completely randomly.
Pair Corralation between Alpha Bank and Bank of Ireland
Assuming the 90 days horizon Alpha Bank SA is expected to generate 0.68 times more return on investment than Bank of Ireland. However, Alpha Bank SA is 1.47 times less risky than Bank of Ireland. It trades about 0.1 of its potential returns per unit of risk. Bank of Ireland is currently generating about -0.04 per unit of risk. If you would invest 39.00 in Alpha Bank SA on October 14, 2024 and sell it today you would earn a total of 1.00 from holding Alpha Bank SA or generate 2.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alpha Bank SA vs. Bank of Ireland
Performance |
| Timeline |
| Alpha Bank SA |
| Bank of Ireland |
Alpha Bank and Bank of Ireland Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alpha Bank and Bank of Ireland
The main advantage of trading using opposite Alpha Bank and Bank of Ireland positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alpha Bank 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.| Alpha Bank vs. National Bank of | Alpha Bank vs. Piraeus Bank SA | Alpha Bank vs. Eurobank Ergasias SA | Alpha Bank vs. First Citizens BancShares |
| Bank of Ireland vs. Alpha Bank SA | Bank of Ireland vs. National Bank of | Bank of Ireland vs. Piraeus Bank SA | Bank of Ireland vs. United Bancorp |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
Other Complementary Tools
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges |