Correlation Between Bloomsbury Publishing and Bank of Ireland
Can any of the company-specific risk be diversified away by investing in both Bloomsbury Publishing and Bank of Ireland 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 Bloomsbury Publishing and Bank of Ireland into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bloomsbury Publishing Plc and Bank of Ireland, you can compare the effects of market volatilities on Bloomsbury Publishing and Bank of Ireland 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 Bloomsbury Publishing with a short position of Bank of Ireland. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bloomsbury Publishing and Bank of Ireland.
Diversification Opportunities for Bloomsbury Publishing and Bank of Ireland
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bloomsbury and Bank is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Bloomsbury Publishing Plc and Bank of Ireland in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank of Ireland and Bloomsbury Publishing 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 Bloomsbury Publishing Plc are associated (or correlated) with Bank of Ireland. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank of Ireland has no effect on the direction of Bloomsbury Publishing i.e., Bloomsbury Publishing and Bank of Ireland go up and down completely randomly.
Pair Corralation between Bloomsbury Publishing and Bank of Ireland
Assuming the 90 days trading horizon Bloomsbury Publishing Plc is expected to under-perform the Bank of Ireland. In addition to that, Bloomsbury Publishing is 1.28 times more volatile than Bank of Ireland. It trades about -0.11 of its total potential returns per unit of risk. Bank of Ireland is currently generating about 0.34 per unit of volatility. If you would invest 865.00 in Bank of Ireland on November 1, 2024 and sell it today you would earn a total of 104.00 from holding Bank of Ireland or generate 12.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bloomsbury Publishing Plc vs. Bank of Ireland
Performance |
| Timeline |
| Bloomsbury Publishing Plc |
| Bank of Ireland |
Bloomsbury Publishing and Bank of Ireland Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bloomsbury Publishing and Bank of Ireland
The main advantage of trading using opposite Bloomsbury Publishing and Bank of Ireland positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bloomsbury Publishing position performs unexpectedly, Bank of Ireland 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 Bank of Ireland will offset losses from the drop in Bank of Ireland's long position.| Bloomsbury Publishing vs. Fortuna Silver Mines | Bloomsbury Publishing vs. Auto Trader Group | Bloomsbury Publishing vs. Indutrade AB | Bloomsbury Publishing vs. Endeavour Mining Corp |
| Bank of Ireland vs. Omega Healthcare Investors | Bank of Ireland vs. Air Products Chemicals | Bank of Ireland vs. Seche Environnement SA | Bank of Ireland vs. Spire Healthcare 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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