Correlation Between ING Bank and Medicalg
Can any of the company-specific risk be diversified away by investing in both ING Bank and Medicalg 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 Medicalg 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 Medicalg, you can compare the effects of market volatilities on ING Bank and Medicalg 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 Medicalg. Check out your portfolio center. Please also check ongoing floating volatility patterns of ING Bank and Medicalg.
Diversification Opportunities for ING Bank and Medicalg
Poor diversification
The 3 months correlation between ING and Medicalg is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding ING Bank lski and Medicalg in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Medicalg 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 Medicalg. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Medicalg has no effect on the direction of ING Bank i.e., ING Bank and Medicalg go up and down completely randomly.
Pair Corralation between ING Bank and Medicalg
Assuming the 90 days trading horizon ING Bank lski is expected to generate 0.38 times more return on investment than Medicalg. However, ING Bank lski is 2.62 times less risky than Medicalg. It trades about -0.12 of its potential returns per unit of risk. Medicalg is currently generating about -0.2 per unit of risk. If you would invest 25,550 in ING Bank lski on August 26, 2024 and sell it today you would lose (1,050) from holding ING Bank lski or give up 4.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ING Bank lski vs. Medicalg
Performance |
| Timeline |
| ING Bank lski |
| Medicalg |
ING Bank and Medicalg Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ING Bank and Medicalg
The main advantage of trading using opposite ING Bank and Medicalg positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ING Bank position performs unexpectedly, Medicalg 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 Medicalg will offset losses from the drop in Medicalg's long position.| ING Bank vs. X Trade Brokers | ING Bank vs. Mercator Medical SA | ING Bank vs. Igoria Trade SA | ING Bank vs. Medicalg |
| Medicalg vs. PLAYWAY SA | Medicalg vs. Medicofarma Biotech SA | Medicalg vs. Bank Millennium SA | Medicalg vs. New Tech Venture |
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 Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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