Correlation Between ING Bank and Medicofarma Biotech
Can any of the company-specific risk be diversified away by investing in both ING Bank and Medicofarma Biotech 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 Medicofarma Biotech 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 Medicofarma Biotech SA, you can compare the effects of market volatilities on ING Bank and Medicofarma Biotech 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 Medicofarma Biotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of ING Bank and Medicofarma Biotech.
Diversification Opportunities for ING Bank and Medicofarma Biotech
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between ING and Medicofarma is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding ING Bank lski and Medicofarma Biotech SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Medicofarma Biotech 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 Medicofarma Biotech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Medicofarma Biotech has no effect on the direction of ING Bank i.e., ING Bank and Medicofarma Biotech go up and down completely randomly.
Pair Corralation between ING Bank and Medicofarma Biotech
Assuming the 90 days trading horizon ING Bank lski is expected to generate 0.41 times more return on investment than Medicofarma Biotech. However, ING Bank lski is 2.44 times less risky than Medicofarma Biotech. It trades about 0.11 of its potential returns per unit of risk. Medicofarma Biotech SA is currently generating about -0.07 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 | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ING Bank lski vs. Medicofarma Biotech SA
Performance |
| Timeline |
| ING Bank lski |
| Medicofarma Biotech |
ING Bank and Medicofarma Biotech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ING Bank and Medicofarma Biotech
The main advantage of trading using opposite ING Bank and Medicofarma Biotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ING Bank position performs unexpectedly, Medicofarma Biotech 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 Medicofarma Biotech will offset losses from the drop in Medicofarma Biotech'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 |
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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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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