Correlation Between Bank of Ireland and Hollywood Bowl
Can any of the company-specific risk be diversified away by investing in both Bank of Ireland and Hollywood Bowl 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 Hollywood Bowl 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 Hollywood Bowl Group, you can compare the effects of market volatilities on Bank of Ireland and Hollywood Bowl 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 Hollywood Bowl. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of Ireland and Hollywood Bowl.
Diversification Opportunities for Bank of Ireland and Hollywood Bowl
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bank and Hollywood is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Bank of Ireland and Hollywood Bowl Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hollywood Bowl Group 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 Hollywood Bowl. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hollywood Bowl Group has no effect on the direction of Bank of Ireland i.e., Bank of Ireland and Hollywood Bowl go up and down completely randomly.
Pair Corralation between Bank of Ireland and Hollywood Bowl
Assuming the 90 days trading horizon Bank of Ireland is expected to under-perform the Hollywood Bowl. In addition to that, Bank of Ireland is 1.6 times more volatile than Hollywood Bowl Group. It trades about -0.14 of its total potential returns per unit of risk. Hollywood Bowl Group is currently generating about 0.05 per unit of volatility. If you would invest 31,700 in Hollywood Bowl Group on September 4, 2024 and sell it today you would earn a total of 350.00 from holding Hollywood Bowl Group or generate 1.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of Ireland vs. Hollywood Bowl Group
Performance |
| Timeline |
| Bank of Ireland |
| Hollywood Bowl Group |
Bank of Ireland and Hollywood Bowl Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of Ireland and Hollywood Bowl
The main advantage of trading using opposite Bank of Ireland and Hollywood Bowl positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of Ireland position performs unexpectedly, Hollywood Bowl 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 Hollywood Bowl will offset losses from the drop in Hollywood Bowl's long position.| Bank of Ireland vs. SupplyMe Capital PLC | Bank of Ireland vs. SM Energy Co | Bank of Ireland vs. FuelCell Energy | Bank of Ireland vs. Grand Vision Media |
| Hollywood Bowl vs. Samsung Electronics Co | Hollywood Bowl vs. Samsung Electronics Co | Hollywood Bowl vs. Hyundai Motor | Hollywood Bowl 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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