Correlation Between Auction Technology and Bank of Ireland
Can any of the company-specific risk be diversified away by investing in both Auction Technology 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 Auction Technology 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 Auction Technology Group and Bank of Ireland, you can compare the effects of market volatilities on Auction Technology 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 Auction Technology with a short position of Bank of Ireland. Check out your portfolio center. Please also check ongoing floating volatility patterns of Auction Technology and Bank of Ireland.
Diversification Opportunities for Auction Technology and Bank of Ireland
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Auction and Bank is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Auction Technology Group 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 Auction Technology 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 Auction Technology Group 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 Auction Technology i.e., Auction Technology and Bank of Ireland go up and down completely randomly.
Pair Corralation between Auction Technology and Bank of Ireland
Assuming the 90 days trading horizon Auction Technology Group is expected to under-perform the Bank of Ireland. In addition to that, Auction Technology is 1.23 times more volatile than Bank of Ireland. It trades about -0.01 of its total potential returns per unit of risk. Bank of Ireland is currently generating about 0.02 per unit of volatility. If you would invest 818.00 in Bank of Ireland on October 13, 2024 and sell it today you would earn a total of 58.00 from holding Bank of Ireland or generate 7.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Auction Technology Group vs. Bank of Ireland
Performance |
| Timeline |
| Auction Technology |
| Bank of Ireland |
Auction Technology and Bank of Ireland Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Auction Technology and Bank of Ireland
The main advantage of trading using opposite Auction Technology and Bank of Ireland positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Auction Technology 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.| Auction Technology vs. Wizz Air Holdings | Auction Technology vs. British American Tobacco | Auction Technology vs. Playtech Plc | Auction Technology vs. JD Sports Fashion |
| Bank of Ireland vs. STMicroelectronics NV | Bank of Ireland vs. LPKF Laser Electronics | Bank of Ireland vs. Compal Electronics GDR | Bank of Ireland vs. Auction Technology Group |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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