Correlation Between Banco De and ING Groep
Can any of the company-specific risk be diversified away by investing in both Banco De 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 Banco De and ING Groep into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Banco de Sabadell and ING Groep NV, you can compare the effects of market volatilities on Banco De 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 Banco De with a short position of ING Groep. Check out your portfolio center. Please also check ongoing floating volatility patterns of Banco De and ING Groep.
Diversification Opportunities for Banco De and ING Groep
Good diversification
The 3 months correlation between Banco and ING is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Banco de Sabadell 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 Banco De 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 Banco de Sabadell 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 Banco De i.e., Banco De and ING Groep go up and down completely randomly.
Pair Corralation between Banco De and ING Groep
Assuming the 90 days horizon Banco de Sabadell is expected to generate 2.53 times more return on investment than ING Groep. However, Banco De is 2.53 times more volatile than ING Groep NV. It trades about 0.3 of its potential returns per unit of risk. ING Groep NV is currently generating about 0.36 per unit of risk. If you would invest 190.00 in Banco de Sabadell on November 4, 2024 and sell it today you would earn a total of 38.00 from holding Banco de Sabadell or generate 20.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 90.91% |
| Values | Daily Returns |
Banco de Sabadell vs. ING Groep NV
Performance |
| Timeline |
| Banco de Sabadell |
| ING Groep NV |
Banco De and ING Groep Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Banco De and ING Groep
The main advantage of trading using opposite Banco De and ING Groep positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Banco De 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.| Banco De vs. ABN AMRO Bank | Banco De vs. Barclays PLC | Banco De vs. Bank of America | Banco De vs. Bank of America |
| ING Groep vs. Bank of America | ING Groep vs. Citigroup | ING Groep vs. Wells Fargo | ING Groep vs. Toronto Dominion Bank |
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 Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
Other Complementary Tools
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities |