Correlation Between Irish Continental and Donegal Investment
Can any of the company-specific risk be diversified away by investing in both Irish Continental and Donegal Investment 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 Irish Continental and Donegal Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Irish Continental Group and Donegal Investment Group, you can compare the effects of market volatilities on Irish Continental and Donegal Investment 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 Irish Continental with a short position of Donegal Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Irish Continental and Donegal Investment.
Diversification Opportunities for Irish Continental and Donegal Investment
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Irish and Donegal is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Irish Continental Group and Donegal Investment Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Donegal Investment and Irish Continental 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 Irish Continental Group are associated (or correlated) with Donegal Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Donegal Investment has no effect on the direction of Irish Continental i.e., Irish Continental and Donegal Investment go up and down completely randomly.
Pair Corralation between Irish Continental and Donegal Investment
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 Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Irish Continental Group vs. Donegal Investment Group
Performance |
| Timeline |
| Irish Continental |
| Donegal Investment |
Irish Continental and Donegal Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Irish Continental and Donegal Investment
The main advantage of trading using opposite Irish Continental and Donegal Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Irish Continental position performs unexpectedly, Donegal Investment 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 Donegal Investment will offset losses from the drop in Donegal Investment's long position.| Irish Continental vs. Dalata Hotel Group | Irish Continental vs. Kingspan Group plc | Irish Continental vs. Glanbia PLC | Irish Continental vs. KLP Aksje Fremvoksende |
| Donegal Investment vs. KLP Aksje Fremvoksende | Donegal Investment vs. Great Western Mining | Donegal Investment vs. Bank of Ireland | Donegal Investment vs. Glenveagh Properties PLC |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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