Correlation Between Bank of Ireland and AfriTin Mining
Can any of the company-specific risk be diversified away by investing in both Bank of Ireland and AfriTin Mining 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 AfriTin Mining 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 AfriTin Mining, you can compare the effects of market volatilities on Bank of Ireland and AfriTin Mining 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 AfriTin Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of Ireland and AfriTin Mining.
Diversification Opportunities for Bank of Ireland and AfriTin Mining
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bank and AfriTin is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Bank of Ireland and AfriTin Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AfriTin Mining 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 AfriTin Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AfriTin Mining has no effect on the direction of Bank of Ireland i.e., Bank of Ireland and AfriTin Mining go up and down completely randomly.
Pair Corralation between Bank of Ireland and AfriTin Mining
Assuming the 90 days trading horizon Bank of Ireland is expected to generate 0.55 times more return on investment than AfriTin Mining. However, Bank of Ireland is 1.81 times less risky than AfriTin Mining. It trades about -0.09 of its potential returns per unit of risk. AfriTin Mining is currently generating about -0.29 per unit of risk. If you would invest 883.00 in Bank of Ireland on August 28, 2024 and sell it today you would lose (42.00) from holding Bank of Ireland or give up 4.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of Ireland vs. AfriTin Mining
Performance |
| Timeline |
| Bank of Ireland |
| AfriTin Mining |
Bank of Ireland and AfriTin Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of Ireland and AfriTin Mining
The main advantage of trading using opposite Bank of Ireland and AfriTin Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of Ireland position performs unexpectedly, AfriTin Mining 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 AfriTin Mining will offset losses from the drop in AfriTin Mining's long position.| Bank of Ireland vs. Primorus Investments plc | Bank of Ireland vs. Livermore Investments Group | Bank of Ireland vs. Nordic Semiconductor ASA | Bank of Ireland vs. Herald Investment Trust |
| AfriTin Mining vs. Givaudan SA | AfriTin Mining vs. Antofagasta PLC | AfriTin Mining vs. Centamin PLC | AfriTin Mining vs. Atalaya 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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