Correlation Between ING Bank and CFI Holding
Can any of the company-specific risk be diversified away by investing in both ING Bank and CFI Holding 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 CFI Holding 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 CFI Holding SA, you can compare the effects of market volatilities on ING Bank and CFI Holding 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 CFI Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of ING Bank and CFI Holding.
Diversification Opportunities for ING Bank and CFI Holding
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ING and CFI is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding ING Bank lski and CFI Holding SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CFI Holding SA 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 CFI Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CFI Holding SA has no effect on the direction of ING Bank i.e., ING Bank and CFI Holding go up and down completely randomly.
Pair Corralation between ING Bank and CFI Holding
Assuming the 90 days trading horizon ING Bank lski is expected to generate 0.29 times more return on investment than CFI Holding. However, ING Bank lski is 3.45 times less risky than CFI Holding. It trades about -0.01 of its potential returns per unit of risk. CFI Holding SA is currently generating about -0.06 per unit of risk. If you would invest 25,950 in ING Bank lski on September 13, 2024 and sell it today you would lose (300.00) from holding ING Bank lski or give up 1.16% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ING Bank lski vs. CFI Holding SA
Performance |
| Timeline |
| ING Bank lski |
| CFI Holding SA |
ING Bank and CFI Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ING Bank and CFI Holding
The main advantage of trading using opposite ING Bank and CFI Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ING Bank position performs unexpectedly, CFI Holding 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 CFI Holding will offset losses from the drop in CFI Holding's long position.| ING Bank vs. UniCredit SpA | ING Bank vs. Santander Bank Polska | ING Bank vs. Bank Polska Kasa | ING Bank vs. mBank SA |
| CFI Holding vs. Echo Investment SA | CFI Holding vs. Centrum Finansowe Banku | CFI Holding vs. Gaming Factory SA | CFI Holding vs. Detalion Games 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
Other Complementary Tools
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| CEOs Directory Screen CEOs from public companies around the world |