Correlation Between Impax Environmental and Bank of Ireland
Can any of the company-specific risk be diversified away by investing in both Impax Environmental 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 Impax Environmental 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 Impax Environmental Markets and Bank of Ireland, you can compare the effects of market volatilities on Impax Environmental 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 Impax Environmental with a short position of Bank of Ireland. Check out your portfolio center. Please also check ongoing floating volatility patterns of Impax Environmental and Bank of Ireland.
Diversification Opportunities for Impax Environmental and Bank of Ireland
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Impax and Bank is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Impax Environmental Markets 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 Impax Environmental 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 Impax Environmental Markets 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 Impax Environmental i.e., Impax Environmental and Bank of Ireland go up and down completely randomly.
Pair Corralation between Impax Environmental and Bank of Ireland
Assuming the 90 days trading horizon Impax Environmental Markets is expected to generate 0.37 times more return on investment than Bank of Ireland. However, Impax Environmental Markets is 2.72 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 -0.03 per unit of risk. If you would invest 39,515 in Impax Environmental Markets on September 3, 2024 and sell it today you would lose (1,865) from holding Impax Environmental Markets or give up 4.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Impax Environmental Markets vs. Bank of Ireland
Performance |
| Timeline |
| Impax Environmental |
| Bank of Ireland |
Impax Environmental and Bank of Ireland Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Impax Environmental and Bank of Ireland
The main advantage of trading using opposite Impax Environmental and Bank of Ireland positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Impax Environmental 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.| Impax Environmental vs. Sabien Technology Group | Impax Environmental vs. Monks Investment Trust | Impax Environmental vs. K3 Business Technology | Impax Environmental vs. Ashtead Technology Holdings |
| Bank of Ireland vs. Ally Financial | Bank of Ireland vs. iShares Physical Silver | Bank of Ireland vs. Greenroc Mining PLC | Bank of Ireland vs. Lundin Mining Corp |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities |