Correlation Between Bank of Ireland Group PLC and Washington Trust
Can any of the company-specific risk be diversified away by investing in both Bank of Ireland Group PLC and Washington Trust 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 Group PLC and Washington Trust 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 Washington Trust Bancorp, you can compare the effects of market volatilities on Bank of Ireland Group PLC and Washington Trust 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 Group PLC with a short position of Washington Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of Ireland Group PLC and Washington Trust.
Diversification Opportunities for Bank of Ireland Group PLC and Washington Trust
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Bank and Washington is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Bank of Ireland and Washington Trust Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Washington Trust Bancorp and Bank of Ireland Group PLC 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 Washington Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Washington Trust Bancorp has no effect on the direction of Bank of Ireland Group PLC i.e., Bank of Ireland Group PLC and Washington Trust go up and down completely randomly.
Pair Corralation between Bank of Ireland Group PLC and Washington Trust
Assuming the 90 days horizon Bank of Ireland is expected to generate 1.38 times more return on investment than Washington Trust. However, Bank of Ireland Group PLC is 1.38 times more volatile than Washington Trust Bancorp. It trades about 0.26 of its potential returns per unit of risk. Washington Trust Bancorp is currently generating about 0.21 per unit of risk. If you would invest 900.00 in Bank of Ireland on October 28, 2024 and sell it today you would earn a total of 115.00 from holding Bank of Ireland or generate 12.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of Ireland vs. Washington Trust Bancorp
Performance |
| Timeline |
| Bank of Ireland Group PLC |
| Washington Trust Bancorp |
Bank of Ireland Group PLC and Washington Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of Ireland Group PLC and Washington Trust
The main advantage of trading using opposite Bank of Ireland Group PLC and Washington Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of Ireland Group PLC position performs unexpectedly, Washington Trust 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 Washington Trust will offset losses from the drop in Washington Trust's long position.| Bank of Ireland Group PLC vs. Alpha Bank SA | Bank of Ireland Group PLC vs. National Bank of | Bank of Ireland Group PLC vs. Piraeus Bank SA | Bank of Ireland Group PLC vs. United Bancorp |
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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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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