Correlation Between SVB T and AIB Group
Can any of the company-specific risk be diversified away by investing in both SVB T 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 SVB T and AIB Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SVB T Corp and AIB Group PLC, you can compare the effects of market volatilities on SVB T 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 SVB T with a short position of AIB Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of SVB T and AIB Group.
Diversification Opportunities for SVB T and AIB Group
Pay attention - limited upside
The 3 months correlation between SVB and AIB is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding SVB T Corp 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 SVB T 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 SVB T Corp 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 SVB T i.e., SVB T and AIB Group go up and down completely randomly.
Pair Corralation between SVB T and AIB Group
Given the investment horizon of 90 days SVB T is expected to generate 13.39 times less return on investment than AIB Group. But when comparing it to its historical volatility, SVB T Corp is 1.14 times less risky than AIB Group. It trades about 0.0 of its potential returns per unit of risk. AIB Group PLC is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 420.00 in AIB Group PLC on November 2, 2024 and sell it today you would earn a total of 10.00 from holding AIB Group PLC or generate 2.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 33.63% |
| Values | Daily Returns |
SVB T Corp vs. AIB Group PLC
Performance |
| Timeline |
| SVB T Corp |
| AIB Group PLC |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
SVB T and AIB Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SVB T and AIB Group
The main advantage of trading using opposite SVB T and AIB Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SVB T 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.| SVB T vs. Katahdin Bankshares Corp | SVB T vs. Marquette National Corp | SVB T vs. United Bancorporation of | SVB T vs. Fentura Financial |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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