Correlation Between ING Bank and Drago Entertainment
Can any of the company-specific risk be diversified away by investing in both ING Bank and Drago Entertainment 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 Drago Entertainment 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 Drago entertainment SA, you can compare the effects of market volatilities on ING Bank and Drago Entertainment 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 Drago Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of ING Bank and Drago Entertainment.
Diversification Opportunities for ING Bank and Drago Entertainment
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between ING and Drago is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding ING Bank lski and Drago entertainment SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Drago entertainment 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 Drago Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Drago entertainment has no effect on the direction of ING Bank i.e., ING Bank and Drago Entertainment go up and down completely randomly.
Pair Corralation between ING Bank and Drago Entertainment
Assuming the 90 days trading horizon ING Bank is expected to generate 2.38 times less return on investment than Drago Entertainment. But when comparing it to its historical volatility, ING Bank lski is 1.4 times less risky than Drago Entertainment. It trades about 0.18 of its potential returns per unit of risk. Drago entertainment SA is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest 1,870 in Drago entertainment SA on October 21, 2024 and sell it today you would earn a total of 230.00 from holding Drago entertainment SA or generate 12.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ING Bank lski vs. Drago entertainment SA
Performance |
| Timeline |
| ING Bank lski |
| Drago entertainment |
ING Bank and Drago Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ING Bank and Drago Entertainment
The main advantage of trading using opposite ING Bank and Drago Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ING Bank position performs unexpectedly, Drago Entertainment 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 Drago Entertainment will offset losses from the drop in Drago Entertainment's long position.| ING Bank vs. Creotech Instruments SA | ING Bank vs. Movie Games SA | ING Bank vs. Marie Brizard Wine | ING Bank vs. Medicofarma Biotech SA |
| Drago Entertainment vs. Ultimate Games SA | Drago Entertainment vs. Enter Air SA | Drago Entertainment vs. Carlson Investments SA | Drago Entertainment vs. Gaming Factory 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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