Correlation Between ING Bank and Cloud Technologies
Can any of the company-specific risk be diversified away by investing in both ING Bank and Cloud Technologies 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 Cloud Technologies 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 Cloud Technologies SA, you can compare the effects of market volatilities on ING Bank and Cloud Technologies 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 Cloud Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of ING Bank and Cloud Technologies.
Diversification Opportunities for ING Bank and Cloud Technologies
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between ING and Cloud is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding ING Bank lski and Cloud Technologies SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cloud Technologies 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 Cloud Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cloud Technologies has no effect on the direction of ING Bank i.e., ING Bank and Cloud Technologies go up and down completely randomly.
Pair Corralation between ING Bank and Cloud Technologies
Assuming the 90 days trading horizon ING Bank lski is expected to generate 1.31 times more return on investment than Cloud Technologies. However, ING Bank is 1.31 times more volatile than Cloud Technologies SA. It trades about 0.11 of its potential returns per unit of risk. Cloud Technologies SA is currently generating about 0.04 per unit of risk. If you would invest 27,300 in ING Bank lski on November 28, 2024 and sell it today you would earn a total of 1,650 from holding ING Bank lski or generate 6.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ING Bank lski vs. Cloud Technologies SA
Performance |
| Timeline |
| ING Bank lski |
| Cloud Technologies |
ING Bank and Cloud Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ING Bank and Cloud Technologies
The main advantage of trading using opposite ING Bank and Cloud Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ING Bank position performs unexpectedly, Cloud Technologies 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 Cloud Technologies will offset losses from the drop in Cloud Technologies' long position.| ING Bank vs. Enter Air SA | ING Bank vs. GreenX Metals | ING Bank vs. X Trade Brokers | ING Bank vs. Mercator Medical SA |
| Cloud Technologies vs. Igoria Trade SA | Cloud Technologies vs. LSI Software SA | Cloud Technologies vs. MCI Management SA | Cloud Technologies vs. Investment Friends Capital |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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