Correlation Between Schweizerische Nationalbank and AIB Group
Can any of the company-specific risk be diversified away by investing in both Schweizerische Nationalbank 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 Schweizerische Nationalbank and AIB Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Schweizerische Nationalbank and AIB Group PLC, you can compare the effects of market volatilities on Schweizerische Nationalbank 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 Schweizerische Nationalbank with a short position of AIB Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Schweizerische Nationalbank and AIB Group.
Diversification Opportunities for Schweizerische Nationalbank and AIB Group
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Schweizerische and AIB is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Schweizerische Nationalbank 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 Schweizerische Nationalbank 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 Schweizerische Nationalbank 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 Schweizerische Nationalbank i.e., Schweizerische Nationalbank and AIB Group go up and down completely randomly.
Pair Corralation between Schweizerische Nationalbank and AIB Group
Assuming the 90 days horizon Schweizerische Nationalbank is expected to under-perform the AIB Group. But the pink sheet apears to be less risky and, when comparing its historical volatility, Schweizerische Nationalbank is 1.5 times less risky than AIB Group. The pink sheet trades about -0.03 of its potential returns per unit of risk. The AIB Group PLC is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 415.00 in AIB Group PLC on October 21, 2024 and sell it today you would earn a total of 15.00 from holding AIB Group PLC or generate 3.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 24.6% |
| Values | Daily Returns |
Schweizerische Nationalbank vs. AIB Group PLC
Performance |
| Timeline |
| Schweizerische Nationalbank |
| AIB Group PLC |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Schweizerische Nationalbank and AIB Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Schweizerische Nationalbank and AIB Group
The main advantage of trading using opposite Schweizerische Nationalbank and AIB Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Schweizerische Nationalbank 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.| Schweizerische Nationalbank vs. Israel Discount Bank | Schweizerische Nationalbank vs. Baraboo Bancorporation | Schweizerische Nationalbank vs. Danske Bank AS | Schweizerische Nationalbank vs. Jyske Bank AS |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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