Correlation Analysis Between ISEQ and Russia TR

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