Correlation Between Donegal Investment and Irish Continental
Can any of the company-specific risk be diversified away by investing in both Donegal Investment and Irish Continental 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 Donegal Investment and Irish Continental into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Donegal Investment Group and Irish Continental Group, you can compare the effects of market volatilities on Donegal Investment and Irish Continental 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 Donegal Investment with a short position of Irish Continental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Donegal Investment and Irish Continental.
Diversification Opportunities for Donegal Investment and Irish Continental
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Donegal and Irish is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Donegal Investment Group and Irish Continental Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Irish Continental and Donegal Investment 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 Donegal Investment Group are associated (or correlated) with Irish Continental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Irish Continental has no effect on the direction of Donegal Investment i.e., Donegal Investment and Irish Continental go up and down completely randomly.
Pair Corralation between Donegal Investment and Irish Continental
If you would invest 540.00 in Irish Continental Group on August 30, 2024 and sell it today you would earn a total of 16.00 from holding Irish Continental Group or generate 2.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Donegal Investment Group vs. Irish Continental Group
Performance |
| Timeline |
| Donegal Investment |
| Irish Continental |
Donegal Investment and Irish Continental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Donegal Investment and Irish Continental
The main advantage of trading using opposite Donegal Investment and Irish Continental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Donegal Investment position performs unexpectedly, Irish Continental 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 Irish Continental will offset losses from the drop in Irish Continental's long position.| Donegal Investment vs. KLP Aksje Fremvoksende | Donegal Investment vs. Great Western Mining | Donegal Investment vs. Bank of Ireland | Donegal Investment vs. Glenveagh Properties PLC |
| Irish Continental vs. Dalata Hotel Group | Irish Continental vs. Kingspan Group plc | Irish Continental vs. Glanbia PLC | Irish Continental vs. KLP Aksje Fremvoksende |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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