Correlation Between Barclays PLC and ING Groep
Can any of the company-specific risk be diversified away by investing in both Barclays PLC 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 Barclays PLC and ING Groep into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barclays PLC and ING Groep NV, you can compare the effects of market volatilities on Barclays PLC 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 Barclays PLC with a short position of ING Groep. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barclays PLC and ING Groep.
Diversification Opportunities for Barclays PLC and ING Groep
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Barclays and ING is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Barclays PLC 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 Barclays PLC 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 Barclays PLC 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 Barclays PLC i.e., Barclays PLC and ING Groep go up and down completely randomly.
Pair Corralation between Barclays PLC and ING Groep
Assuming the 90 days trading horizon Barclays PLC is expected to generate 18.62 times more return on investment than ING Groep. However, Barclays PLC is 18.62 times more volatile than ING Groep NV. It trades about 0.08 of its potential returns per unit of risk. ING Groep NV is currently generating about 0.08 per unit of risk. If you would invest 21,618 in Barclays PLC on January 14, 2025 and sell it today you would earn a total of 6,197 from holding Barclays PLC or generate 28.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.39% |
| Values | Daily Returns |
Barclays PLC vs. ING Groep NV
Performance |
| Timeline |
| Barclays PLC |
| ING Groep NV |
Barclays PLC and ING Groep Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barclays PLC and ING Groep
The main advantage of trading using opposite Barclays PLC and ING Groep positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barclays PLC 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.| Barclays PLC vs. HSBC Holdings plc | Barclays PLC vs. UBS Group AG | Barclays PLC vs. The Bank of | Barclays PLC vs. ING Groep NV |
| ING Groep vs. HSBC Holdings plc | ING Groep vs. UBS Group AG | ING Groep vs. The Bank of | ING Groep vs. Barclays 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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