Correlation Between CEOTRONICS and AIB Group
Can any of the company-specific risk be diversified away by investing in both CEOTRONICS and AIB Group 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 CEOTRONICS and AIB Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CEOTRONICS and AIB Group plc, you can compare the effects of market volatilities on CEOTRONICS and AIB Group 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 CEOTRONICS with a short position of AIB Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of CEOTRONICS and AIB Group.
Diversification Opportunities for CEOTRONICS and AIB Group
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between CEOTRONICS and AIB is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding CEOTRONICS and AIB Group plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AIB Group plc and CEOTRONICS 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 CEOTRONICS are associated (or correlated) with AIB Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AIB Group plc has no effect on the direction of CEOTRONICS i.e., CEOTRONICS and AIB Group go up and down completely randomly.
Pair Corralation between CEOTRONICS and AIB Group
Assuming the 90 days trading horizon CEOTRONICS is expected to generate 2.01 times less return on investment than AIB Group. But when comparing it to its historical volatility, CEOTRONICS is 1.15 times less risky than AIB Group. It trades about 0.03 of its potential returns per unit of risk. AIB Group plc is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 296.00 in AIB Group plc on August 30, 2024 and sell it today you would earn a total of 197.00 from holding AIB Group plc or generate 66.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CEOTRONICS vs. AIB Group plc
Performance |
| Timeline |
| CEOTRONICS |
| AIB Group plc |
CEOTRONICS and AIB Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CEOTRONICS and AIB Group
The main advantage of trading using opposite CEOTRONICS and AIB Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CEOTRONICS position performs unexpectedly, AIB Group 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 AIB Group will offset losses from the drop in AIB Group's long position.| CEOTRONICS vs. CITY OFFICE REIT | CEOTRONICS vs. Tower One Wireless | CEOTRONICS vs. UNIVMUSIC GRPADR050 | CEOTRONICS vs. Nucletron Electronic Aktiengesellschaft |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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