Correlation Between Noble Financials and ING Bank
Can any of the company-specific risk be diversified away by investing in both Noble Financials and ING Bank 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 Noble Financials and ING Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Noble Financials SA and ING Bank lski, you can compare the effects of market volatilities on Noble Financials and ING Bank 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 Noble Financials with a short position of ING Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Noble Financials and ING Bank.
Diversification Opportunities for Noble Financials and ING Bank
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Noble and ING is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Noble Financials SA and ING Bank lski in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ING Bank lski and Noble Financials 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 Noble Financials SA are associated (or correlated) with ING Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ING Bank lski has no effect on the direction of Noble Financials i.e., Noble Financials and ING Bank go up and down completely randomly.
Pair Corralation between Noble Financials and ING Bank
Assuming the 90 days trading horizon Noble Financials SA is expected to generate 2.66 times more return on investment than ING Bank. However, Noble Financials is 2.66 times more volatile than ING Bank lski. It trades about 0.04 of its potential returns per unit of risk. ING Bank lski is currently generating about 0.06 per unit of risk. If you would invest 6,150 in Noble Financials SA on August 28, 2024 and sell it today you would earn a total of 2,450 from holding Noble Financials SA or generate 39.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Noble Financials SA vs. ING Bank lski
Performance |
| Timeline |
| Noble Financials |
| ING Bank lski |
Noble Financials and ING Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Noble Financials and ING Bank
The main advantage of trading using opposite Noble Financials and ING Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Noble Financials position performs unexpectedly, ING Bank 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 Bank will offset losses from the drop in ING Bank's long position.| Noble Financials vs. Saule Technologies SA | Noble Financials vs. CI Games SA | Noble Financials vs. New Tech Venture | Noble Financials vs. Mlk Foods Public |
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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