Correlation Between Bank of Ireland and Ion Beam
Can any of the company-specific risk be diversified away by investing in both Bank of Ireland and Ion Beam 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 Bank of Ireland and Ion Beam into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank of Ireland and Ion Beam Applications, you can compare the effects of market volatilities on Bank of Ireland and Ion Beam 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 Bank of Ireland with a short position of Ion Beam. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of Ireland and Ion Beam.
Diversification Opportunities for Bank of Ireland and Ion Beam
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bank and Ion is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Bank of Ireland and Ion Beam Applications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ion Beam Applications and Bank of Ireland 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 Bank of Ireland are associated (or correlated) with Ion Beam. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ion Beam Applications has no effect on the direction of Bank of Ireland i.e., Bank of Ireland and Ion Beam go up and down completely randomly.
Pair Corralation between Bank of Ireland and Ion Beam
Assuming the 90 days trading horizon Bank of Ireland is expected to generate 0.94 times more return on investment than Ion Beam. However, Bank of Ireland is 1.07 times less risky than Ion Beam. It trades about 0.01 of its potential returns per unit of risk. Ion Beam Applications is currently generating about -0.01 per unit of risk. If you would invest 848.00 in Bank of Ireland on August 29, 2024 and sell it today you would lose (3.00) from holding Bank of Ireland or give up 0.35% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of Ireland vs. Ion Beam Applications
Performance |
| Timeline |
| Bank of Ireland |
| Ion Beam Applications |
Bank of Ireland and Ion Beam Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of Ireland and Ion Beam
The main advantage of trading using opposite Bank of Ireland and Ion Beam positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of Ireland position performs unexpectedly, Ion Beam 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 Ion Beam will offset losses from the drop in Ion Beam's long position.| Bank of Ireland vs. Martin Marietta Materials | Bank of Ireland vs. Kinnevik Investment AB | Bank of Ireland vs. Vulcan Materials Co | Bank of Ireland vs. Hansa Investment |
| Ion Beam vs. Samsung Electronics Co | Ion Beam vs. Samsung Electronics Co | Ion Beam vs. Hyundai Motor | Ion Beam vs. Toyota Motor Corp |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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