Correlation Between ING Bank and Centrum Finansowe
Can any of the company-specific risk be diversified away by investing in both ING Bank and Centrum Finansowe 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 Centrum Finansowe 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 Centrum Finansowe Banku, you can compare the effects of market volatilities on ING Bank and Centrum Finansowe 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 Centrum Finansowe. Check out your portfolio center. Please also check ongoing floating volatility patterns of ING Bank and Centrum Finansowe.
Diversification Opportunities for ING Bank and Centrum Finansowe
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between ING and Centrum is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding ING Bank lski and Centrum Finansowe Banku in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Centrum Finansowe Banku 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 Centrum Finansowe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Centrum Finansowe Banku has no effect on the direction of ING Bank i.e., ING Bank and Centrum Finansowe go up and down completely randomly.
Pair Corralation between ING Bank and Centrum Finansowe
Assuming the 90 days trading horizon ING Bank is expected to generate 1.04 times less return on investment than Centrum Finansowe. But when comparing it to its historical volatility, ING Bank lski is 1.16 times less risky than Centrum Finansowe. It trades about 0.06 of its potential returns per unit of risk. Centrum Finansowe Banku is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 347.00 in Centrum Finansowe Banku on August 27, 2024 and sell it today you would earn a total of 198.00 from holding Centrum Finansowe Banku or generate 57.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.56% |
| Values | Daily Returns |
ING Bank lski vs. Centrum Finansowe Banku
Performance |
| Timeline |
| ING Bank lski |
| Centrum Finansowe Banku |
ING Bank and Centrum Finansowe Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ING Bank and Centrum Finansowe
The main advantage of trading using opposite ING Bank and Centrum Finansowe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ING Bank position performs unexpectedly, Centrum Finansowe 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 Centrum Finansowe will offset losses from the drop in Centrum Finansowe's long position.The idea behind ING Bank lski and Centrum Finansowe Banku pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Centrum Finansowe vs. Carlson Investments SA | Centrum Finansowe vs. Asseco Business Solutions | Centrum Finansowe vs. Detalion Games SA | Centrum Finansowe vs. Asseco South Eastern |
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 Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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