Correlation Between Greencoat Renewables and AIB Group
Can any of the company-specific risk be diversified away by investing in both Greencoat Renewables 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 Greencoat Renewables and AIB Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Greencoat Renewables PLC and AIB Group PLC, you can compare the effects of market volatilities on Greencoat Renewables 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 Greencoat Renewables with a short position of AIB Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Greencoat Renewables and AIB Group.
Diversification Opportunities for Greencoat Renewables and AIB Group
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Greencoat and AIB is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Greencoat Renewables PLC 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 Greencoat Renewables 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 Greencoat Renewables PLC 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 Greencoat Renewables i.e., Greencoat Renewables and AIB Group go up and down completely randomly.
Pair Corralation between Greencoat Renewables and AIB Group
Assuming the 90 days trading horizon Greencoat Renewables PLC is expected to under-perform the AIB Group. In addition to that, Greencoat Renewables is 1.07 times more volatile than AIB Group PLC. It trades about -0.12 of its total potential returns per unit of risk. AIB Group PLC is currently generating about 0.26 per unit of volatility. If you would invest 536.00 in AIB Group PLC on November 8, 2024 and sell it today you would earn a total of 54.00 from holding AIB Group PLC or generate 10.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Greencoat Renewables PLC vs. AIB Group PLC
Performance |
| Timeline |
| Greencoat Renewables PLC |
| AIB Group PLC |
Greencoat Renewables and AIB Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Greencoat Renewables and AIB Group
The main advantage of trading using opposite Greencoat Renewables and AIB Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Greencoat Renewables 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.| Greencoat Renewables vs. Dalata Hotel Group | Greencoat Renewables vs. AIB Group PLC | Greencoat Renewables vs. Glanbia PLC |
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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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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