Correlation Between SVB T and Permanent TSB

Can any of the company-specific risk be diversified away by investing in both SVB T and Permanent TSB 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 SVB T and Permanent TSB into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between SVB T Corp and Permanent TSB Group, you can compare the effects of market volatilities on SVB T and Permanent TSB 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 SVB T with a short position of Permanent TSB. Check out your portfolio center. Please also check ongoing floating volatility patterns of SVB T and Permanent TSB.

Diversification Opportunities for SVB T and Permanent TSB

0.27

Correlation Coefficient

SVB T  Permanent TSB

Modest diversification

The 3 months correlation between SVB and Permanent is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding SVB T Corp and Permanent TSB Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Permanent TSB Group and SVB T 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 SVB T Corp are associated (or correlated) with Permanent TSB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Permanent TSB Group has no effect on the direction of SVB T i.e., SVB T and Permanent TSB go up and down completely randomly.

Pair Corralation between SVB T and Permanent TSB

Given the investment horizon of 90 days SVB T is expected to generate 361.71 times less return on investment than Permanent TSB. But when comparing it to its historical volatility, SVB T Corp is 8.18 times less risky than Permanent TSB. It trades about 0.0 of its potential returns per unit of risk. Permanent TSB Group is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  170.00  in Permanent TSB Group on December 28, 2024 and sell it today you would earn a total of  25.00  from holding Permanent TSB Group or generate 14.71% return on investment over 90 days.

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

SVB T Corp  vs.  Permanent TSB Group

SVB T Corp

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in SVB T Corp are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable fundamental drivers, SVB T is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Permanent TSB Group

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Permanent TSB Group are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak primary indicators, Permanent TSB showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SVB T and Permanent TSB

The main advantage of trading using opposite SVB T and Permanent TSB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SVB T position performs unexpectedly, Permanent TSB 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 Permanent TSB will offset losses from the drop in Permanent TSB's long position.

The idea behind SVB T Corp and Permanent TSB Group 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.

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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.