Correlation Between Now and Bank of Ireland Group PLC
Can any of the company-specific risk be diversified away by investing in both Now and Bank of Ireland Group PLC 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 Now and Bank of Ireland Group PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Now Inc and Bank of Ireland, you can compare the effects of market volatilities on Now and Bank of Ireland Group PLC 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 Now with a short position of Bank of Ireland Group PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Now and Bank of Ireland Group PLC.
Diversification Opportunities for Now and Bank of Ireland Group PLC
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Now and Bank is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Now Inc and Bank of Ireland in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank of Ireland Group PLC and Now 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 Now Inc are associated (or correlated) with Bank of Ireland Group PLC. 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 Group PLC has no effect on the direction of Now i.e., Now and Bank of Ireland Group PLC go up and down completely randomly.
Pair Corralation between Now and Bank of Ireland Group PLC
Given the investment horizon of 90 days Now Inc is expected to generate 0.91 times more return on investment than Bank of Ireland Group PLC. However, Now Inc is 1.1 times less risky than Bank of Ireland Group PLC. It trades about 0.36 of its potential returns per unit of risk. Bank of Ireland is currently generating about 0.26 per unit of risk. If you would invest 1,291 in Now Inc on October 28, 2024 and sell it today you would earn a total of 216.00 from holding Now Inc or generate 16.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Now Inc vs. Bank of Ireland
Performance |
| Timeline |
| Now Inc |
| Bank of Ireland Group PLC |
Now and Bank of Ireland Group PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Now and Bank of Ireland Group PLC
The main advantage of trading using opposite Now and Bank of Ireland Group PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Now position performs unexpectedly, Bank of Ireland Group PLC 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 Group PLC will offset losses from the drop in Bank of Ireland Group PLC's long position.The idea behind Now Inc and Bank of Ireland pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| 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 |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
Other Complementary Tools
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data |