Correlation Between Metals Exploration and Bank of Ireland Group PLC
Can any of the company-specific risk be diversified away by investing in both Metals Exploration and Bank of Ireland Group PLC 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 Metals Exploration and Bank of Ireland Group PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Metals Exploration Plc and Bank of Ireland, you can compare the effects of market volatilities on Metals Exploration and Bank of Ireland Group PLC 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 Metals Exploration with a short position of Bank of Ireland Group PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Metals Exploration and Bank of Ireland Group PLC.
Diversification Opportunities for Metals Exploration and Bank of Ireland Group PLC
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Metals and Bank is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Metals Exploration Plc and Bank of Ireland in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank of Ireland Group PLC and Metals Exploration 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 Metals Exploration Plc are associated (or correlated) with Bank of Ireland Group PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank of Ireland Group PLC has no effect on the direction of Metals Exploration i.e., Metals Exploration and Bank of Ireland Group PLC go up and down completely randomly.
Pair Corralation between Metals Exploration and Bank of Ireland Group PLC
Assuming the 90 days trading horizon Metals Exploration Plc is expected to generate 1.47 times more return on investment than Bank of Ireland Group PLC. However, Metals Exploration is 1.47 times more volatile than Bank of Ireland. It trades about 0.05 of its potential returns per unit of risk. Bank of Ireland is currently generating about 0.04 per unit of risk. If you would invest 485.00 in Metals Exploration Plc on November 28, 2024 and sell it today you would earn a total of 115.00 from holding Metals Exploration Plc or generate 23.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Metals Exploration Plc vs. Bank of Ireland
Performance |
| Timeline |
| Metals Exploration Plc |
| Bank of Ireland Group PLC |
Metals Exploration and Bank of Ireland Group PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Metals Exploration and Bank of Ireland Group PLC
The main advantage of trading using opposite Metals Exploration and Bank of Ireland Group PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Metals Exploration position performs unexpectedly, Bank of Ireland Group PLC 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 Bank of Ireland Group PLC will offset losses from the drop in Bank of Ireland Group PLC's long position.| Metals Exploration vs. Beeks Trading | Metals Exploration vs. Kinnevik Investment AB | Metals Exploration vs. Hansa Investment | Metals Exploration vs. Jade Road Investments |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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