Correlation Between Peoples Fin and Permanent TSB
Can any of the company-specific risk be diversified away by investing in both Peoples Fin and Permanent TSB 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 Peoples Fin and Permanent TSB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Peoples Fin and Permanent TSB Group, you can compare the effects of market volatilities on Peoples Fin and Permanent TSB 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 Peoples Fin with a short position of Permanent TSB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Peoples Fin and Permanent TSB.
Diversification Opportunities for Peoples Fin and Permanent TSB
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Peoples and Permanent is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Peoples Fin and Permanent TSB Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Permanent TSB Group and Peoples Fin 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 Peoples Fin are associated (or correlated) with Permanent TSB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Permanent TSB Group has no effect on the direction of Peoples Fin i.e., Peoples Fin and Permanent TSB go up and down completely randomly.
Pair Corralation between Peoples Fin and Permanent TSB
Given the investment horizon of 90 days Peoples Fin is expected to generate 2.39 times more return on investment than Permanent TSB. However, Peoples Fin is 2.39 times more volatile than Permanent TSB Group. It trades about 0.24 of its potential returns per unit of risk. Permanent TSB Group is currently generating about -0.21 per unit of risk. If you would invest 4,615 in Peoples Fin on September 1, 2024 and sell it today you would earn a total of 904.00 from holding Peoples Fin or generate 19.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Peoples Fin vs. Permanent TSB Group
Performance |
| Timeline |
| Peoples Fin |
| Permanent TSB Group |
Peoples Fin and Permanent TSB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Peoples Fin and Permanent TSB
The main advantage of trading using opposite Peoples Fin and Permanent TSB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Peoples Fin position performs unexpectedly, Permanent TSB 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 Permanent TSB will offset losses from the drop in Permanent TSB's long position.| Peoples Fin vs. Home Federal Bancorp | Peoples Fin vs. Magyar Bancorp | Peoples Fin vs. Finward Bancorp | Peoples Fin vs. Community West Bancshares |
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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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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