Correlation Between ING Bank and Develia SA
Can any of the company-specific risk be diversified away by investing in both ING Bank and Develia SA 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 Develia SA 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 Develia SA, you can compare the effects of market volatilities on ING Bank and Develia SA 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 Develia SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of ING Bank and Develia SA.
Diversification Opportunities for ING Bank and Develia SA
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ING and Develia is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding ING Bank lski and Develia SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Develia 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 Develia SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Develia SA has no effect on the direction of ING Bank i.e., ING Bank and Develia SA go up and down completely randomly.
Pair Corralation between ING Bank and Develia SA
Assuming the 90 days trading horizon ING Bank lski is expected to under-perform the Develia SA. In addition to that, ING Bank is 1.15 times more volatile than Develia SA. It trades about -0.23 of its total potential returns per unit of risk. Develia SA is currently generating about 0.14 per unit of volatility. If you would invest 571.00 in Develia SA on August 30, 2024 and sell it today you would earn a total of 27.00 from holding Develia SA or generate 4.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ING Bank lski vs. Develia SA
Performance |
| Timeline |
| ING Bank lski |
| Develia SA |
ING Bank and Develia SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ING Bank and Develia SA
The main advantage of trading using opposite ING Bank and Develia SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ING Bank position performs unexpectedly, Develia SA 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 Develia SA will offset losses from the drop in Develia SA's long position.| ING Bank vs. UniCredit SpA | ING Bank vs. Santander Bank Polska | ING Bank vs. Bank Polska Kasa | ING Bank vs. Bank Handlowy w |
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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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