Correlation Between ING Bank and ADX
Can any of the company-specific risk be diversified away by investing in both ING Bank and ADX 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 ING Bank and ADX into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ING Bank lski and ADX, you can compare the effects of market volatilities on ING Bank and ADX 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 ING Bank with a short position of ADX. Check out your portfolio center. Please also check ongoing floating volatility patterns of ING Bank and ADX.
Diversification Opportunities for ING Bank and ADX
Weak diversification
The 3 months correlation between ING and ADX is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding ING Bank lski and ADX in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ADX and ING Bank 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 ING Bank lski are associated (or correlated) with ADX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ADX has no effect on the direction of ING Bank i.e., ING Bank and ADX go up and down completely randomly.
Pair Corralation between ING Bank and ADX
Assuming the 90 days trading horizon ING Bank lski is expected to under-perform the ADX. But the stock apears to be less risky and, when comparing its historical volatility, ING Bank lski is 1.58 times less risky than ADX. The stock trades about -0.11 of its potential returns per unit of risk. The ADX is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest 29.00 in ADX on September 2, 2024 and sell it today you would lose (3.00) from holding ADX or give up 10.34% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 79.69% |
| Values | Daily Returns |
ING Bank lski vs. ADX
Performance |
| Timeline |
| ING Bank lski |
| ADX |
ING Bank and ADX Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ING Bank and ADX
The main advantage of trading using opposite ING Bank and ADX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ING Bank position performs unexpectedly, ADX 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 ADX will offset losses from the drop in ADX's long position.| ING Bank vs. SOFTWARE MANSION SPOLKA | ING Bank vs. Carlson Investments SA | ING Bank vs. Road Studio SA | ING Bank vs. Echo Investment SA |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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