Correlation Between Bank of Ireland and MT Bank
Can any of the company-specific risk be diversified away by investing in both Bank of Ireland and MT Bank 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 MT Bank 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 MT Bank Corp, you can compare the effects of market volatilities on Bank of Ireland and MT Bank 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 MT Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of Ireland and MT Bank.
Diversification Opportunities for Bank of Ireland and MT Bank
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Bank and 0JW2 is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Bank of Ireland and MT Bank Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MT Bank Corp 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 MT Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MT Bank Corp has no effect on the direction of Bank of Ireland i.e., Bank of Ireland and MT Bank go up and down completely randomly.
Pair Corralation between Bank of Ireland and MT Bank
Assuming the 90 days trading horizon Bank of Ireland is expected to under-perform the MT Bank. But the stock apears to be less risky and, when comparing its historical volatility, Bank of Ireland is 1.15 times less risky than MT Bank. The stock trades about -0.03 of its potential returns per unit of risk. The MT Bank Corp is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 19,561 in MT Bank Corp on September 1, 2024 and sell it today you would earn a total of 2,438 from holding MT Bank Corp or generate 12.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Bank of Ireland vs. MT Bank Corp
Performance |
| Timeline |
| Bank of Ireland |
| MT Bank Corp |
Bank of Ireland and MT Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of Ireland and MT Bank
The main advantage of trading using opposite Bank of Ireland and MT Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of Ireland position performs unexpectedly, MT Bank 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 MT Bank will offset losses from the drop in MT Bank's long position.| Bank of Ireland vs. SupplyMe Capital PLC | Bank of Ireland vs. Lloyds Banking Group | Bank of Ireland vs. Premier African Minerals | Bank of Ireland vs. SANTANDER UK 8 |
| MT Bank vs. McEwen Mining | MT Bank vs. iShares Physical Silver | MT Bank vs. Beowulf Mining | MT Bank vs. Blackrock World Mining |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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