Correlation Between ING Bank and Movie Games
Can any of the company-specific risk be diversified away by investing in both ING Bank and Movie Games 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 Movie Games 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 Movie Games SA, you can compare the effects of market volatilities on ING Bank and Movie Games 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 Movie Games. Check out your portfolio center. Please also check ongoing floating volatility patterns of ING Bank and Movie Games.
Diversification Opportunities for ING Bank and Movie Games
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ING and Movie is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding ING Bank lski and Movie Games SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Movie Games 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 Movie Games. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Movie Games SA has no effect on the direction of ING Bank i.e., ING Bank and Movie Games go up and down completely randomly.
Pair Corralation between ING Bank and Movie Games
Assuming the 90 days trading horizon ING Bank lski is expected to generate 0.53 times more return on investment than Movie Games. However, ING Bank lski is 1.88 times less risky than Movie Games. It trades about 0.06 of its potential returns per unit of risk. Movie Games SA is currently generating about 0.0 per unit of risk. If you would invest 14,449 in ING Bank lski on September 3, 2024 and sell it today you would earn a total of 9,201 from holding ING Bank lski or generate 63.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ING Bank lski vs. Movie Games SA
Performance |
| Timeline |
| ING Bank lski |
| Movie Games SA |
ING Bank and Movie Games Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ING Bank and Movie Games
The main advantage of trading using opposite ING Bank and Movie Games positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ING Bank position performs unexpectedly, Movie Games 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 Movie Games will offset losses from the drop in Movie Games' long position.| ING Bank vs. UniCredit SpA | ING Bank vs. Santander Bank Polska | ING Bank vs. Bank Polska Kasa | ING Bank vs. Bank Handlowy w |
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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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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