Correlation Between Hansa Investment and Bank of Ireland
Can any of the company-specific risk be diversified away by investing in both Hansa Investment and Bank of Ireland 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 Hansa Investment and Bank of Ireland into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hansa Investment and Bank of Ireland, you can compare the effects of market volatilities on Hansa Investment and Bank of Ireland 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 Hansa Investment with a short position of Bank of Ireland. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hansa Investment and Bank of Ireland.
Diversification Opportunities for Hansa Investment and Bank of Ireland
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hansa and Bank is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Hansa Investment and Bank of Ireland in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank of Ireland and Hansa 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 Hansa Investment are associated (or correlated) with Bank of Ireland. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank of Ireland has no effect on the direction of Hansa Investment i.e., Hansa Investment and Bank of Ireland go up and down completely randomly.
Pair Corralation between Hansa Investment and Bank of Ireland
Assuming the 90 days trading horizon Hansa Investment is expected to generate 0.54 times more return on investment than Bank of Ireland. However, Hansa Investment is 1.84 times less risky than Bank of Ireland. It trades about 0.03 of its potential returns per unit of risk. Bank of Ireland is currently generating about -0.04 per unit of risk. If you would invest 21,298 in Hansa Investment on August 29, 2024 and sell it today you would earn a total of 702.00 from holding Hansa Investment or generate 3.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hansa Investment vs. Bank of Ireland
Performance |
| Timeline |
| Hansa Investment |
| Bank of Ireland |
Hansa Investment and Bank of Ireland Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hansa Investment and Bank of Ireland
The main advantage of trading using opposite Hansa Investment and Bank of Ireland positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hansa Investment position performs unexpectedly, Bank of Ireland 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 Bank of Ireland will offset losses from the drop in Bank of Ireland's long position.| Hansa Investment vs. CATCo Reinsurance Opportunities | Hansa Investment vs. BH Macro Limited | Hansa Investment vs. TMT Investments PLC | Hansa Investment vs. Intermediate Capital Group |
| Bank of Ireland vs. Martin Marietta Materials | Bank of Ireland vs. Kinnevik Investment AB | Bank of Ireland vs. Vulcan Materials Co | Bank of Ireland vs. Hansa Investment |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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