Correlation Between Glenveagh Properties and Irish Continental
Can any of the company-specific risk be diversified away by investing in both Glenveagh Properties 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 Glenveagh Properties and Irish Continental into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Glenveagh Properties PLC and Irish Continental Group, you can compare the effects of market volatilities on Glenveagh Properties 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 Glenveagh Properties with a short position of Irish Continental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Glenveagh Properties and Irish Continental.
Diversification Opportunities for Glenveagh Properties and Irish Continental
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Glenveagh and Irish is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Glenveagh Properties PLC and Irish Continental Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Irish Continental and Glenveagh Properties 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 Glenveagh Properties PLC 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 Glenveagh Properties i.e., Glenveagh Properties and Irish Continental go up and down completely randomly.
Pair Corralation between Glenveagh Properties and Irish Continental
Assuming the 90 days trading horizon Glenveagh Properties PLC is expected to under-perform the Irish Continental. But the stock apears to be less risky and, when comparing its historical volatility, Glenveagh Properties PLC is 1.82 times less risky than Irish Continental. The stock trades about -0.2 of its potential returns per unit of risk. The Irish Continental Group is currently generating about 0.07 of returns per unit of risk over similar time horizon. 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 Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Glenveagh Properties PLC vs. Irish Continental Group
Performance |
| Timeline |
| Glenveagh Properties PLC |
| Irish Continental |
Glenveagh Properties and Irish Continental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Glenveagh Properties and Irish Continental
The main advantage of trading using opposite Glenveagh Properties and Irish Continental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Glenveagh Properties 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.| Glenveagh Properties vs. Dalata Hotel Group | Glenveagh Properties vs. AIB Group PLC | Glenveagh Properties vs. Irish Residential Properties | Glenveagh Properties vs. Bank of Ireland |
| 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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