Correlation Between Bank of Ireland and Atresmedia
Can any of the company-specific risk be diversified away by investing in both Bank of Ireland and Atresmedia 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 Atresmedia 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 Atresmedia, you can compare the effects of market volatilities on Bank of Ireland and Atresmedia 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 Atresmedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of Ireland and Atresmedia.
Diversification Opportunities for Bank of Ireland and Atresmedia
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Bank and Atresmedia is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Bank of Ireland and Atresmedia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atresmedia 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 Atresmedia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atresmedia has no effect on the direction of Bank of Ireland i.e., Bank of Ireland and Atresmedia go up and down completely randomly.
Pair Corralation between Bank of Ireland and Atresmedia
Assuming the 90 days trading horizon Bank of Ireland is expected to generate 4.51 times less return on investment than Atresmedia. In addition to that, Bank of Ireland is 2.08 times more volatile than Atresmedia. It trades about 0.01 of its total potential returns per unit of risk. Atresmedia is currently generating about 0.1 per unit of volatility. If you would invest 316.00 in Atresmedia on September 12, 2024 and sell it today you would earn a total of 157.00 from holding Atresmedia or generate 49.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of Ireland vs. Atresmedia
Performance |
| Timeline |
| Bank of Ireland |
| Atresmedia |
Bank of Ireland and Atresmedia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of Ireland and Atresmedia
The main advantage of trading using opposite Bank of Ireland and Atresmedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of Ireland position performs unexpectedly, Atresmedia 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 Atresmedia will offset losses from the drop in Atresmedia's long position.| Bank of Ireland vs. Samsung Electronics Co | Bank of Ireland vs. Samsung Electronics Co | Bank of Ireland vs. Hyundai Motor | Bank of Ireland vs. Toyota Motor Corp |
| Atresmedia vs. Hong Kong Land | Atresmedia vs. Neometals | Atresmedia vs. Coor Service Management | Atresmedia vs. Fidelity Sustainable USD |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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