Correlation Between Farmers Bancorp and AIB Group
Can any of the company-specific risk be diversified away by investing in both Farmers Bancorp 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 Farmers Bancorp and AIB Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Farmers Bancorp and AIB Group PLC, you can compare the effects of market volatilities on Farmers Bancorp 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 Farmers Bancorp with a short position of AIB Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Farmers Bancorp and AIB Group.
Diversification Opportunities for Farmers Bancorp and AIB Group
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Farmers and AIB is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Farmers Bancorp 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 Farmers Bancorp 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 Farmers Bancorp 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 Farmers Bancorp i.e., Farmers Bancorp and AIB Group go up and down completely randomly.
Pair Corralation between Farmers Bancorp and AIB Group
If you would invest 3,300 in Farmers Bancorp on September 2, 2024 and sell it today you would earn a total of 250.00 from holding Farmers Bancorp or generate 7.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 4.76% |
| Values | Daily Returns |
Farmers Bancorp vs. AIB Group PLC
Performance |
| Timeline |
| Farmers Bancorp |
| AIB Group PLC |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Farmers Bancorp and AIB Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Farmers Bancorp and AIB Group
The main advantage of trading using opposite Farmers Bancorp and AIB Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Farmers Bancorp 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.| Farmers Bancorp vs. First Farmers Financial | Farmers Bancorp vs. Farmers Merchants Bancorp | Farmers Bancorp vs. Lakeland Financial | Farmers Bancorp vs. Eagle Financial Services |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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