Correlation Between Bank of Ireland and Uniphar Group

Can any of the company-specific risk be diversified away by investing in both Bank of Ireland and Uniphar 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 Bank of Ireland and Uniphar Group into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Bank of Ireland and Uniphar Group PLC, you can compare the effects of market volatilities on Bank of Ireland and Uniphar 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 Bank of Ireland with a short position of Uniphar Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of Ireland and Uniphar Group.

Diversification Opportunities for Bank of Ireland and Uniphar Group

0.83

Correlation Coefficient

Bank of Ireland  Uniphar Group

Very poor diversification

The 3 months correlation between Bank and Uniphar is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Bank of Ireland and Uniphar Group PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Uniphar Group PLC and Bank of Ireland 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 Bank of Ireland are associated (or correlated) with Uniphar Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Uniphar Group PLC has no effect on the direction of Bank of Ireland i.e., Bank of Ireland and Uniphar Group go up and down completely randomly.

Pair Corralation between Bank of Ireland and Uniphar Group

Assuming the 90 days trading horizon Bank of Ireland is expected to under-perform the Uniphar Group. In addition to that, Bank of Ireland is 1.11 times more volatile than Uniphar Group PLC. It trades about -0.17 of its total potential returns per unit of risk. Uniphar Group PLC is currently generating about -0.12 per unit of volatility. If you would invest  256.00  in Uniphar Group PLC on August 30, 2024 and sell it today you would lose (36.00) from holding Uniphar Group PLC or give up 14.06% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

Bank of Ireland  vs.  Uniphar Group PLC

Bank of Ireland

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bank of Ireland has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in December 2024. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Uniphar Group PLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Uniphar Group PLC has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in December 2024. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Bank of Ireland and Uniphar Group

The main advantage of trading using opposite Bank of Ireland and Uniphar Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of Ireland position performs unexpectedly, Uniphar 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 Uniphar Group will offset losses from the drop in Uniphar Group's long position.

The idea behind Bank of Ireland and Uniphar Group PLC pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.