Correlation Between Irish Continental and Greencoat Renewables
Can any of the company-specific risk be diversified away by investing in both Irish Continental and Greencoat Renewables 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 Greencoat Renewables 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 Greencoat Renewables PLC, you can compare the effects of market volatilities on Irish Continental and Greencoat Renewables 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 Greencoat Renewables. Check out your portfolio center. Please also check ongoing floating volatility patterns of Irish Continental and Greencoat Renewables.
Diversification Opportunities for Irish Continental and Greencoat Renewables
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Irish and Greencoat is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Irish Continental Group and Greencoat Renewables PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Greencoat Renewables PLC 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 Greencoat Renewables. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Greencoat Renewables PLC has no effect on the direction of Irish Continental i.e., Irish Continental and Greencoat Renewables go up and down completely randomly.
Pair Corralation between Irish Continental and Greencoat Renewables
Assuming the 90 days trading horizon Irish Continental Group is expected to generate 1.17 times more return on investment than Greencoat Renewables. However, Irish Continental is 1.17 times more volatile than Greencoat Renewables PLC. It trades about 0.07 of its potential returns per unit of risk. Greencoat Renewables PLC is currently generating about -0.05 per unit of risk. 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 | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Irish Continental Group vs. Greencoat Renewables PLC
Performance |
| Timeline |
| Irish Continental |
| Greencoat Renewables PLC |
Irish Continental and Greencoat Renewables Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Irish Continental and Greencoat Renewables
The main advantage of trading using opposite Irish Continental and Greencoat Renewables positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Irish Continental position performs unexpectedly, Greencoat Renewables 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 Greencoat Renewables will offset losses from the drop in Greencoat Renewables' 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 |
| Greencoat Renewables vs. Dalata Hotel Group | Greencoat Renewables vs. AIB Group PLC | Greencoat Renewables vs. Glanbia 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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