Correlation Between Alumexx NV and ING Groep
Can any of the company-specific risk be diversified away by investing in both Alumexx NV and ING Groep 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 Alumexx NV and ING Groep into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alumexx NV and ING Groep NV, you can compare the effects of market volatilities on Alumexx NV and ING Groep 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 Alumexx NV with a short position of ING Groep. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alumexx NV and ING Groep.
Diversification Opportunities for Alumexx NV and ING Groep
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Alumexx and ING is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Alumexx NV and ING Groep NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ING Groep NV and Alumexx NV 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 Alumexx NV are associated (or correlated) with ING Groep. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ING Groep NV has no effect on the direction of Alumexx NV i.e., Alumexx NV and ING Groep go up and down completely randomly.
Pair Corralation between Alumexx NV and ING Groep
Assuming the 90 days trading horizon Alumexx NV is expected to generate 0.96 times more return on investment than ING Groep. However, Alumexx NV is 1.04 times less risky than ING Groep. It trades about -0.07 of its potential returns per unit of risk. ING Groep NV is currently generating about -0.32 per unit of risk. If you would invest 128.00 in Alumexx NV on August 27, 2024 and sell it today you would lose (2.00) from holding Alumexx NV or give up 1.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alumexx NV vs. ING Groep NV
Performance |
| Timeline |
| Alumexx NV |
| ING Groep NV |
Alumexx NV and ING Groep Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alumexx NV and ING Groep
The main advantage of trading using opposite Alumexx NV and ING Groep positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alumexx NV position performs unexpectedly, ING Groep 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 ING Groep will offset losses from the drop in ING Groep's long position.| Alumexx NV vs. DGB Group NV | Alumexx NV vs. Ease2pay NV | Alumexx NV vs. Ctac NV | Alumexx NV vs. iShares SP 500 |
| ING Groep vs. Aegon NV | ING Groep vs. ABN Amro Group | ING Groep vs. Koninklijke Philips NV | ING Groep vs. Unilever PLC |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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