Correlation Between Media and AIB Group
Can any of the company-specific risk be diversified away by investing in both Media 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 Media and AIB Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Media and Games and AIB Group plc, you can compare the effects of market volatilities on Media 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 Media with a short position of AIB Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Media and AIB Group.
Diversification Opportunities for Media and AIB Group
Modest diversification
The 3 months correlation between Media and AIB is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Media and Games 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 Media 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 Media and Games 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 Media i.e., Media and AIB Group go up and down completely randomly.
Pair Corralation between Media and AIB Group
Assuming the 90 days trading horizon Media and Games is expected to under-perform the AIB Group. In addition to that, Media is 2.12 times more volatile than AIB Group plc. It trades about -0.24 of its total potential returns per unit of risk. AIB Group plc is currently generating about -0.11 per unit of volatility. If you would invest 531.00 in AIB Group plc on September 24, 2024 and sell it today you would lose (24.00) from holding AIB Group plc or give up 4.52% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Media and Games vs. AIB Group plc
Performance |
Timeline |
Media and Games |
AIB Group plc |
Media and AIB Group Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Media and AIB Group
The main advantage of trading using opposite Media and AIB Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Media 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.The idea behind Media and Games and AIB 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.AIB Group vs. ANGLER GAMING PLC | AIB Group vs. Thai Beverage Public | AIB Group vs. Media and Games | AIB Group vs. GigaMedia |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
Other Complementary Tools
Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
Stocks Directory Find actively traded stocks across global markets | |
Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated |