Correlation Between Bank of Ireland and OneSavings Bank
Can any of the company-specific risk be diversified away by investing in both Bank of Ireland and OneSavings 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 OneSavings 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 OneSavings Bank PLC, you can compare the effects of market volatilities on Bank of Ireland and OneSavings 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 OneSavings Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of Ireland and OneSavings Bank.
Diversification Opportunities for Bank of Ireland and OneSavings Bank
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Bank and OneSavings is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Bank of Ireland and OneSavings Bank PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OneSavings Bank PLC 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 OneSavings Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OneSavings Bank PLC has no effect on the direction of Bank of Ireland i.e., Bank of Ireland and OneSavings Bank go up and down completely randomly.
Pair Corralation between Bank of Ireland and OneSavings Bank
Assuming the 90 days trading horizon Bank of Ireland is expected to under-perform the OneSavings Bank. In addition to that, Bank of Ireland is 1.3 times more volatile than OneSavings Bank PLC. It trades about -0.09 of its total potential returns per unit of risk. OneSavings Bank PLC is currently generating about 0.11 per unit of volatility. If you would invest 37,100 in OneSavings Bank PLC on August 28, 2024 and sell it today you would earn a total of 1,520 from holding OneSavings Bank PLC or generate 4.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of Ireland vs. OneSavings Bank PLC
Performance |
| Timeline |
| Bank of Ireland |
| OneSavings Bank PLC |
Bank of Ireland and OneSavings Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of Ireland and OneSavings Bank
The main advantage of trading using opposite Bank of Ireland and OneSavings Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of Ireland position performs unexpectedly, OneSavings 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 OneSavings Bank will offset losses from the drop in OneSavings Bank'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 |
| OneSavings Bank vs. Batm Advanced Communications | OneSavings Bank vs. Fulcrum Metals PLC | OneSavings Bank vs. Zegona Communications Plc | OneSavings Bank vs. Gaztransport et Technigaz |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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