Correlation Between Glenveagh Properties and Bank of Ireland

Can any of the company-specific risk be diversified away by investing in both Glenveagh Properties 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 Glenveagh Properties 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 Glenveagh Properties PLC and Bank of Ireland, you can compare the effects of market volatilities on Glenveagh Properties 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 Glenveagh Properties with a short position of Bank of Ireland. Check out your portfolio center. Please also check ongoing floating volatility patterns of Glenveagh Properties and Bank of Ireland.

Diversification Opportunities for Glenveagh Properties and Bank of Ireland

-0.47

Correlation Coefficient

Glenveagh Properties  Bank of Ireland

Very good diversification

The 3 months correlation between Glenveagh and Bank is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Glenveagh Properties PLC 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 Glenveagh Properties 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 Glenveagh Properties PLC 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 Glenveagh Properties i.e., Glenveagh Properties and Bank of Ireland go up and down completely randomly.

Pair Corralation between Glenveagh Properties and Bank of Ireland

Assuming the 90 days trading horizon Glenveagh Properties PLC is expected to under-perform the Bank of Ireland. But the stock apears to be less risky and, when comparing its historical volatility, Glenveagh Properties PLC is 1.19 times less risky than Bank of Ireland. The stock trades about -0.04 of its potential returns per unit of risk. The Bank of Ireland is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  869.00  in Bank of Ireland on December 30, 2024 and sell it today you would earn a total of  226.00  from holding Bank of Ireland or generate 26.01% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Glenveagh Properties PLC  vs.  Bank of Ireland

Glenveagh Properties PLC

Risk-Adjusted Performance

Very Weak

Over the last 90 days Glenveagh Properties PLC has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Glenveagh Properties is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Bank of Ireland

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Bank of Ireland are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Bank of Ireland reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Glenveagh Properties and Bank of Ireland

The main advantage of trading using opposite Glenveagh Properties and Bank of Ireland positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Glenveagh Properties 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.

The idea behind Glenveagh Properties PLC and Bank of Ireland 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 Transaction History module to view history of all your transactions and understand their impact on performance.