Correlation Between Israel Discount and AIB Group
Can any of the company-specific risk be diversified away by investing in both Israel Discount 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 Israel Discount and AIB Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Israel Discount Bank and AIB Group PLC, you can compare the effects of market volatilities on Israel Discount 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 Israel Discount with a short position of AIB Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Israel Discount and AIB Group.
Diversification Opportunities for Israel Discount and AIB Group
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Israel and AIB is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Israel Discount Bank 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 Israel Discount 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 Israel Discount Bank 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 Israel Discount i.e., Israel Discount and AIB Group go up and down completely randomly.
Pair Corralation between Israel Discount and AIB Group
If you would invest 4,547 in Israel Discount Bank on November 2, 2024 and sell it today you would earn a total of 1,653 from holding Israel Discount Bank or generate 36.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 0.5% |
| Values | Daily Returns |
Israel Discount Bank vs. AIB Group PLC
Performance |
| Timeline |
| Israel Discount Bank |
| AIB Group PLC |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Israel Discount and AIB Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Israel Discount and AIB Group
The main advantage of trading using opposite Israel Discount and AIB Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Israel Discount 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.| Israel Discount vs. Baraboo Bancorporation | Israel Discount vs. Schweizerische Nationalbank | Israel Discount vs. Danske Bank AS | Israel Discount vs. Absa Group Limited |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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