Correlation Between Dupont De and ING Groep
Can any of the company-specific risk be diversified away by investing in both Dupont 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 Dupont 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 Dupont De Nemours and ING Groep NV, you can compare the effects of market volatilities on Dupont 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 Dupont De with a short position of ING Groep. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dupont De and ING Groep.
Diversification Opportunities for Dupont De and ING Groep
Good diversification
The 3 months correlation between Dupont and ING is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours 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 Dupont 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 Dupont De Nemours 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 Dupont De i.e., Dupont De and ING Groep go up and down completely randomly.
Pair Corralation between Dupont De and ING Groep
Allowing for the 90-day total investment horizon Dupont De is expected to generate 10.24 times less return on investment than ING Groep. In addition to that, Dupont De is 1.23 times more volatile than ING Groep NV. It trades about 0.04 of its total potential returns per unit of risk. ING Groep NV is currently generating about 0.55 per unit of volatility. If you would invest 1,459 in ING Groep NV on October 24, 2024 and sell it today you would earn a total of 142.00 from holding ING Groep NV or generate 9.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.74% |
| Values | Daily Returns |
Dupont De Nemours vs. ING Groep NV
Performance |
| Timeline |
| Dupont De Nemours |
| ING Groep NV |
Dupont De and ING Groep Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dupont De and ING Groep
The main advantage of trading using opposite Dupont De and ING Groep positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dupont 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.| Dupont De vs. Eastman Chemical | Dupont De vs. Olin Corporation | Dupont De vs. Cabot | Dupont De vs. Kronos Worldwide |
| 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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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