Correlation Between ASM International and ING Groep
Can any of the company-specific risk be diversified away by investing in both ASM International 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 ASM International and ING Groep into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ASM International NV and ING Groep NV, you can compare the effects of market volatilities on ASM International 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 ASM International with a short position of ING Groep. Check out your portfolio center. Please also check ongoing floating volatility patterns of ASM International and ING Groep.
Diversification Opportunities for ASM International and ING Groep
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ASM and ING is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding ASM International 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 ASM International 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 ASM International 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 ASM International i.e., ASM International and ING Groep go up and down completely randomly.
Pair Corralation between ASM International and ING Groep
Assuming the 90 days trading horizon ASM International NV is expected to generate 1.7 times more return on investment than ING Groep. However, ASM International is 1.7 times more volatile than ING Groep NV. It trades about 0.05 of its potential returns per unit of risk. ING Groep NV is currently generating about 0.05 per unit of risk. If you would invest 32,354 in ASM International NV on August 27, 2024 and sell it today you would earn a total of 18,106 from holding ASM International NV or generate 55.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ASM International NV vs. ING Groep NV
Performance |
| Timeline |
| ASM International |
| ING Groep NV |
ASM International and ING Groep Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ASM International and ING Groep
The main advantage of trading using opposite ASM International and ING Groep positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ASM International 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.| ASM International vs. BE Semiconductor Industries | ASM International vs. ASML Holding NV | ASM International vs. NN Group NV | ASM International vs. Aalberts Industries NV |
| 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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