Correlation Between FFW and AIB Group
Can any of the company-specific risk be diversified away by investing in both FFW 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 FFW and AIB Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FFW Corporation and AIB Group PLC, you can compare the effects of market volatilities on FFW 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 FFW with a short position of AIB Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of FFW and AIB Group.
Diversification Opportunities for FFW and AIB Group
Good diversification
The 3 months correlation between FFW and AIB is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding FFW Corp. 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 FFW 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 FFW Corporation 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 FFW i.e., FFW and AIB Group go up and down completely randomly.
Pair Corralation between FFW and AIB Group
If you would invest 430.00 in AIB Group PLC on September 2, 2024 and sell it today you would earn a total of 0.00 from holding AIB Group PLC or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.76% |
| Values | Daily Returns |
FFW Corp. vs. AIB Group PLC
Performance |
| Timeline |
| FFW Corporation |
| AIB Group PLC |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
FFW and AIB Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FFW and AIB Group
The main advantage of trading using opposite FFW and AIB Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FFW 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.| FFW vs. First Farmers Financial | FFW vs. Farmers Merchants Bancorp | FFW vs. Lakeland Financial | FFW 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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