Correlation Between Permanent TSB and Peoples Fin
Can any of the company-specific risk be diversified away by investing in both Permanent TSB and Peoples Fin 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 Permanent TSB and Peoples Fin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Permanent TSB Group and Peoples Fin, you can compare the effects of market volatilities on Permanent TSB and Peoples Fin 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 Permanent TSB with a short position of Peoples Fin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Permanent TSB and Peoples Fin.
Diversification Opportunities for Permanent TSB and Peoples Fin
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Permanent and Peoples is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Permanent TSB Group and Peoples Fin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Peoples Fin and Permanent TSB 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 Permanent TSB Group are associated (or correlated) with Peoples Fin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Peoples Fin has no effect on the direction of Permanent TSB i.e., Permanent TSB and Peoples Fin go up and down completely randomly.
Pair Corralation between Permanent TSB and Peoples Fin
Assuming the 90 days horizon Permanent TSB Group is expected to under-perform the Peoples Fin. But the pink sheet apears to be less risky and, when comparing its historical volatility, Permanent TSB Group is 1.15 times less risky than Peoples Fin. The pink sheet trades about -0.03 of its potential returns per unit of risk. The Peoples Fin is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 4,659 in Peoples Fin on August 28, 2024 and sell it today you would earn a total of 1,217 from holding Peoples Fin or generate 26.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Permanent TSB Group vs. Peoples Fin
Performance |
| Timeline |
| Permanent TSB Group |
| Peoples Fin |
Permanent TSB and Peoples Fin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Permanent TSB and Peoples Fin
The main advantage of trading using opposite Permanent TSB and Peoples Fin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Permanent TSB position performs unexpectedly, Peoples Fin 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 Peoples Fin will offset losses from the drop in Peoples Fin's long position.| Permanent TSB vs. Japan Post Holdings | Permanent TSB vs. Commercial International Bank | Permanent TSB vs. Kasikornbank Public Co | Permanent TSB vs. China Merchants Bank |
| Peoples Fin vs. Fifth Third Bancorp | Peoples Fin vs. Huntington Bancshares Incorporated | Peoples Fin vs. MT Bank |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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