Correlation Between ING Bank and LSI Software
Can any of the company-specific risk be diversified away by investing in both ING Bank and LSI Software 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 LSI Software 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 LSI Software SA, you can compare the effects of market volatilities on ING Bank and LSI Software 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 LSI Software. Check out your portfolio center. Please also check ongoing floating volatility patterns of ING Bank and LSI Software.
Diversification Opportunities for ING Bank and LSI Software
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between ING and LSI is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding ING Bank lski and LSI Software SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LSI Software 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 LSI Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LSI Software SA has no effect on the direction of ING Bank i.e., ING Bank and LSI Software go up and down completely randomly.
Pair Corralation between ING Bank and LSI Software
Assuming the 90 days trading horizon ING Bank lski is expected to generate 0.92 times more return on investment than LSI Software. However, ING Bank lski is 1.09 times less risky than LSI Software. It trades about 0.11 of its potential returns per unit of risk. LSI Software SA is currently generating about 0.06 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 Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ING Bank lski vs. LSI Software SA
Performance |
| Timeline |
| ING Bank lski |
| LSI Software SA |
ING Bank and LSI Software Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ING Bank and LSI Software
The main advantage of trading using opposite ING Bank and LSI Software positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ING Bank position performs unexpectedly, LSI Software 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 LSI Software will offset losses from the drop in LSI Software's 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 |
| LSI Software vs. X Trade Brokers | LSI Software vs. Bank Millennium SA | LSI Software vs. Alior Bank SA | LSI Software vs. Skyline Investment 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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