Correlation Between Bank of Ireland and Ocean Harvest
Can any of the company-specific risk be diversified away by investing in both Bank of Ireland and Ocean Harvest 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 Ocean Harvest 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 Ocean Harvest Technology, you can compare the effects of market volatilities on Bank of Ireland and Ocean Harvest 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 Ocean Harvest. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of Ireland and Ocean Harvest.
Diversification Opportunities for Bank of Ireland and Ocean Harvest
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bank and Ocean is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Bank of Ireland and Ocean Harvest Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ocean Harvest Technology 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 Ocean Harvest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ocean Harvest Technology has no effect on the direction of Bank of Ireland i.e., Bank of Ireland and Ocean Harvest go up and down completely randomly.
Pair Corralation between Bank of Ireland and Ocean Harvest
Assuming the 90 days trading horizon Bank of Ireland is expected to generate 0.83 times more return on investment than Ocean Harvest. However, Bank of Ireland is 1.2 times less risky than Ocean Harvest. It trades about 0.02 of its potential returns per unit of risk. Ocean Harvest Technology is currently generating about -0.01 per unit of risk. If you would invest 825.00 in Bank of Ireland on September 26, 2024 and sell it today you would earn a total of 55.00 from holding Bank of Ireland or generate 6.67% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Bank of Ireland vs. Ocean Harvest Technology
Performance |
Timeline |
Bank of Ireland |
Ocean Harvest Technology |
Bank of Ireland and Ocean Harvest Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Bank of Ireland and Ocean Harvest
The main advantage of trading using opposite Bank of Ireland and Ocean Harvest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of Ireland position performs unexpectedly, Ocean Harvest 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 Ocean Harvest will offset losses from the drop in Ocean Harvest's long position.Bank of Ireland vs. Spirent Communications plc | Bank of Ireland vs. Beowulf Mining | Bank of Ireland vs. Silvercorp Metals | Bank of Ireland vs. Charter Communications Cl |
Ocean Harvest vs. Bank of Ireland | Ocean Harvest vs. Synchrony Financial | Ocean Harvest vs. Aeorema Communications Plc | Ocean Harvest vs. Alior Bank SA |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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