Correlation Between Rithm Capital and Bank of Ireland
Can any of the company-specific risk be diversified away by investing in both Rithm Capital 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 Rithm Capital 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 Rithm Capital Corp and Bank of Ireland, you can compare the effects of market volatilities on Rithm Capital 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 Rithm Capital with a short position of Bank of Ireland. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rithm Capital and Bank of Ireland.
Diversification Opportunities for Rithm Capital and Bank of Ireland
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Rithm and Bank is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Rithm Capital Corp 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 Rithm Capital 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 Rithm Capital Corp 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 Rithm Capital i.e., Rithm Capital and Bank of Ireland go up and down completely randomly.
Pair Corralation between Rithm Capital and Bank of Ireland
Assuming the 90 days trading horizon Rithm Capital Corp is expected to generate 0.12 times more return on investment than Bank of Ireland. However, Rithm Capital Corp is 8.52 times less risky than Bank of Ireland. It trades about 0.14 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 2,461 in Rithm Capital Corp on October 14, 2024 and sell it today you would earn a total of 15.00 from holding Rithm Capital Corp or generate 0.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Rithm Capital Corp vs. Bank of Ireland
Performance |
| Timeline |
| Rithm Capital Corp |
| Bank of Ireland |
Rithm Capital and Bank of Ireland Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rithm Capital and Bank of Ireland
The main advantage of trading using opposite Rithm Capital and Bank of Ireland positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rithm Capital 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.| Rithm Capital vs. Rithm Capital Corp | Rithm Capital vs. Rithm Capital Corp | Rithm Capital vs. Rithm Capital Corp | Rithm Capital vs. PennyMac Mortgage Investment |
| Bank of Ireland vs. Alpha Bank SA | Bank of Ireland vs. National Bank of | Bank of Ireland vs. Piraeus Bank SA | Bank of Ireland vs. United Bancorp |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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