Correlation Between ING Bank and Live Motion
Can any of the company-specific risk be diversified away by investing in both ING Bank and Live Motion 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 Live Motion 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 Live Motion Games, you can compare the effects of market volatilities on ING Bank and Live Motion 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 Live Motion. Check out your portfolio center. Please also check ongoing floating volatility patterns of ING Bank and Live Motion.
Diversification Opportunities for ING Bank and Live Motion
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ING and Live is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding ING Bank lski and Live Motion Games in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Live Motion Games 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 Live Motion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Live Motion Games has no effect on the direction of ING Bank i.e., ING Bank and Live Motion go up and down completely randomly.
Pair Corralation between ING Bank and Live Motion
Assuming the 90 days trading horizon ING Bank lski is expected to generate 0.62 times more return on investment than Live Motion. However, ING Bank lski is 1.62 times less risky than Live Motion. It trades about -0.11 of its potential returns per unit of risk. Live Motion Games is currently generating about -0.47 per unit of risk. If you would invest 24,850 in ING Bank lski on September 1, 2024 and sell it today you would lose (1,200) from holding ING Bank lski or give up 4.83% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.0% |
| Values | Daily Returns |
ING Bank lski vs. Live Motion Games
Performance |
| Timeline |
| ING Bank lski |
| Live Motion Games |
ING Bank and Live Motion Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ING Bank and Live Motion
The main advantage of trading using opposite ING Bank and Live Motion positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ING Bank position performs unexpectedly, Live Motion 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 Live Motion will offset losses from the drop in Live Motion's long position.| ING Bank vs. Enter Air SA | ING Bank vs. Varsav Game Studios | ING Bank vs. Globe Trade Centre | ING Bank vs. Igoria Trade SA |
| Live Motion vs. Saule Technologies SA | Live Motion vs. LSI Software SA | Live Motion vs. Investment Friends Capital | Live Motion vs. Kool2play 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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