Correlation Between Bank of Ireland and Spire Healthcare

Can any of the company-specific risk be diversified away by investing in both Bank of Ireland and Spire Healthcare 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 Spire Healthcare 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 Spire Healthcare Group, you can compare the effects of market volatilities on Bank of Ireland and Spire Healthcare 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 Spire Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of Ireland and Spire Healthcare.

Diversification Opportunities for Bank of Ireland and Spire Healthcare

0.78

Correlation Coefficient

Bank of Ireland  Spire Healthcare

Poor diversification

The 3 months correlation between Bank and Spire is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Bank of Ireland and Spire Healthcare Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spire Healthcare 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 Spire Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Spire Healthcare has no effect on the direction of Bank of Ireland i.e., Bank of Ireland and Spire Healthcare go up and down completely randomly.

Pair Corralation between Bank of Ireland and Spire Healthcare

Assuming the 90 days trading horizon Bank of Ireland is expected to generate 1.33 times less return on investment than Spire Healthcare. In addition to that, Bank of Ireland is 1.26 times more volatile than Spire Healthcare Group. It trades about 0.15 of its total potential returns per unit of risk. Spire Healthcare Group is currently generating about 0.24 per unit of volatility. If you would invest  18,284  in Spire Healthcare Group on April 24, 2025 and sell it today you would earn a total of  4,216  from holding Spire Healthcare Group or generate 23.06% 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.  Spire Healthcare Group

Bank of Ireland

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Bank of Ireland are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Bank of Ireland unveiled solid returns over the last few months and may actually be approaching a breakup point.

Spire Healthcare

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Spire Healthcare Group are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Spire Healthcare exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Bank of Ireland and Spire Healthcare

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

The idea behind Bank of Ireland and Spire Healthcare 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.

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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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.