Correlation Between Bank of Ireland and Itau Unibanco
Can any of the company-specific risk be diversified away by investing in both Bank of Ireland and Itau Unibanco 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 Itau Unibanco 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 Itau Unibanco Banco, you can compare the effects of market volatilities on Bank of Ireland and Itau Unibanco 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 Itau Unibanco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of Ireland and Itau Unibanco.
Diversification Opportunities for Bank of Ireland and Itau Unibanco
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bank and Itau is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Bank of Ireland and Itau Unibanco Banco in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Itau Unibanco Banco 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 Itau Unibanco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Itau Unibanco Banco has no effect on the direction of Bank of Ireland i.e., Bank of Ireland and Itau Unibanco go up and down completely randomly.
Pair Corralation between Bank of Ireland and Itau Unibanco
Assuming the 90 days horizon Bank of Ireland is expected to generate 1.08 times more return on investment than Itau Unibanco. However, Bank of Ireland is 1.08 times more volatile than Itau Unibanco Banco. It trades about -0.1 of its potential returns per unit of risk. Itau Unibanco Banco is currently generating about -0.17 per unit of risk. If you would invest 1,035 in Bank of Ireland on October 14, 2024 and sell it today you would lose (133.00) from holding Bank of Ireland or give up 12.85% 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. Itau Unibanco Banco
Performance |
| Timeline |
| Bank of Ireland |
| Itau Unibanco Banco |
Bank of Ireland and Itau Unibanco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of Ireland and Itau Unibanco
The main advantage of trading using opposite Bank of Ireland and Itau Unibanco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of Ireland position performs unexpectedly, Itau Unibanco 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 Itau Unibanco will offset losses from the drop in Itau Unibanco'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 |
| Itau Unibanco vs. Grupo Financiero Galicia | Itau Unibanco vs. Banco Macro SA | Itau Unibanco vs. Banco Santander Brasil | Itau Unibanco vs. Lloyds Banking Group |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
Other Complementary Tools
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity |