Correlation Between Bank of Ireland and First Horizon
Can any of the company-specific risk be diversified away by investing in both Bank of Ireland and First Horizon 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 First Horizon 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 First Horizon National, you can compare the effects of market volatilities on Bank of Ireland and First Horizon 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 First Horizon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of Ireland and First Horizon.
Diversification Opportunities for Bank of Ireland and First Horizon
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Bank and First is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Bank of Ireland and First Horizon National in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Horizon National 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 First Horizon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Horizon National has no effect on the direction of Bank of Ireland i.e., Bank of Ireland and First Horizon go up and down completely randomly.
Pair Corralation between Bank of Ireland and First Horizon
Assuming the 90 days horizon Bank of Ireland is expected to under-perform the First Horizon. But the pink sheet apears to be less risky and, when comparing its historical volatility, Bank of Ireland is 1.28 times less risky than First Horizon. The pink sheet trades about -0.1 of its potential returns per unit of risk. The First Horizon National is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 1,633 in First Horizon National on October 14, 2024 and sell it today you would earn a total of 373.00 from holding First Horizon National or generate 22.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of Ireland vs. First Horizon National
Performance |
| Timeline |
| Bank of Ireland |
| First Horizon National |
Bank of Ireland and First Horizon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of Ireland and First Horizon
The main advantage of trading using opposite Bank of Ireland and First Horizon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of Ireland position performs unexpectedly, First Horizon 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 First Horizon will offset losses from the drop in First Horizon's long position.| Bank of Ireland vs. Alpha Bank SA | Bank of Ireland vs. National Bank of | Bank of Ireland vs. Piraeus Bank SA | Bank of Ireland vs. United Bancorp |
| First Horizon vs. Zions Bancorporation | First Horizon vs. KeyCorp | First Horizon vs. Comerica | First Horizon vs. Western Alliance Bancorporation |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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