Correlation Between Integral Acquisition and AIB Group
Can any of the company-specific risk be diversified away by investing in both Integral Acquisition 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 Integral Acquisition and AIB Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Integral Acquisition 1 and AIB Group plc, you can compare the effects of market volatilities on Integral Acquisition 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 Integral Acquisition with a short position of AIB Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Integral Acquisition and AIB Group.
Diversification Opportunities for Integral Acquisition and AIB Group
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Integral and AIB is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Integral Acquisition 1 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 Integral Acquisition 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 Integral Acquisition 1 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 Integral Acquisition i.e., Integral Acquisition and AIB Group go up and down completely randomly.
Pair Corralation between Integral Acquisition and AIB Group
Given the investment horizon of 90 days Integral Acquisition 1 is expected to under-perform the AIB Group. But the stock apears to be less risky and, when comparing its historical volatility, Integral Acquisition 1 is 1.95 times less risky than AIB Group. The stock trades about -0.36 of its potential returns per unit of risk. The AIB Group plc is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,070 in AIB Group plc on September 1, 2024 and sell it today you would earn a total of 19.00 from holding AIB Group plc or generate 1.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 42.86% |
| Values | Daily Returns |
Integral Acquisition 1 vs. AIB Group plc
Performance |
| Timeline |
| Integral Acquisition |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| AIB Group plc |
Integral Acquisition and AIB Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Integral Acquisition and AIB Group
The main advantage of trading using opposite Integral Acquisition and AIB Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Integral Acquisition 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.The idea behind Integral Acquisition 1 and AIB Group plc pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| AIB Group vs. Plumas Bancorp | AIB Group vs. Merchants Bancorp | AIB Group vs. BancFirst | AIB Group vs. BBVA Banco Frances |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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