Correlation Between Ocean Harvest and Bank of Ireland
Can any of the company-specific risk be diversified away by investing in both Ocean Harvest and Bank of Ireland 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 Ocean Harvest and Bank of Ireland into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ocean Harvest Technology and Bank of Ireland, you can compare the effects of market volatilities on Ocean Harvest and Bank of Ireland 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 Ocean Harvest with a short position of Bank of Ireland. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ocean Harvest and Bank of Ireland.
Diversification Opportunities for Ocean Harvest and Bank of Ireland
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ocean and Bank is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Ocean Harvest Technology and Bank of Ireland in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank of Ireland and Ocean Harvest 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 Ocean Harvest Technology are associated (or correlated) with Bank of Ireland. 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 has no effect on the direction of Ocean Harvest i.e., Ocean Harvest and Bank of Ireland go up and down completely randomly.
Pair Corralation between Ocean Harvest and Bank of Ireland
Assuming the 90 days trading horizon Ocean Harvest Technology is expected to under-perform the Bank of Ireland. In addition to that, Ocean Harvest is 1.46 times more volatile than Bank of Ireland. It trades about -0.03 of its total potential returns per unit of risk. Bank of Ireland is currently generating about 0.02 per unit of volatility. If you would invest 834.00 in Bank of Ireland on September 26, 2024 and sell it today you would earn a total of 46.00 from holding Bank of Ireland or generate 5.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 87.43% |
| Values | Daily Returns |
Ocean Harvest Technology vs. Bank of Ireland
Performance |
| Timeline |
| Ocean Harvest Technology |
| Bank of Ireland |
Ocean Harvest and Bank of Ireland Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ocean Harvest and Bank of Ireland
The main advantage of trading using opposite Ocean Harvest and Bank of Ireland positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ocean Harvest position performs unexpectedly, Bank of Ireland 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 will offset losses from the drop in Bank of Ireland's long position.| Ocean Harvest vs. Uniper SE | Ocean Harvest vs. Mulberry Group PLC | Ocean Harvest vs. London Security Plc | Ocean Harvest vs. Triad Group PLC |
| Bank of Ireland vs. Batm Advanced Communications | Bank of Ireland vs. Bisichi Mining PLC | Bank of Ireland vs. Telecom Italia SpA | Bank of Ireland vs. Gamma Communications 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 Global Correlations module to find global opportunities by holding instruments from different markets.
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