Correlation Between ING Bank and M Food
Can any of the company-specific risk be diversified away by investing in both ING Bank and M Food 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 M Food 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 M Food SA, you can compare the effects of market volatilities on ING Bank and M Food 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 M Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of ING Bank and M Food.
Diversification Opportunities for ING Bank and M Food
Very good diversification
The 3 months correlation between ING and MFD is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding ING Bank lski and M Food SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on M Food 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 M Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of M Food SA has no effect on the direction of ING Bank i.e., ING Bank and M Food go up and down completely randomly.
Pair Corralation between ING Bank and M Food
Assuming the 90 days trading horizon ING Bank lski is expected to generate 0.51 times more return on investment than M Food. However, ING Bank lski is 1.97 times less risky than M Food. It trades about -0.01 of its potential returns per unit of risk. M Food SA is currently generating about -0.43 per unit of risk. If you would invest 25,950 in ING Bank lski on September 13, 2024 and sell it today you would lose (300.00) from holding ING Bank lski or give up 1.16% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 50.0% |
| Values | Daily Returns |
ING Bank lski vs. M Food SA
Performance |
| Timeline |
| ING Bank lski |
| M Food SA |
ING Bank and M Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ING Bank and M Food
The main advantage of trading using opposite ING Bank and M Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ING Bank position performs unexpectedly, M Food 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 M Food will offset losses from the drop in M Food's long position.| ING Bank vs. UniCredit SpA | ING Bank vs. Santander Bank Polska | ING Bank vs. Bank Polska Kasa | ING Bank vs. mBank SA |
| M Food vs. Poznanska Korporacja Budowlana | M Food vs. Esotiq Henderson SA | M Food vs. Toya SA | M Food vs. Betacom 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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