Correlation Between ING Bank and Novavis Group
Can any of the company-specific risk be diversified away by investing in both ING Bank and Novavis Group 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 Novavis Group 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 Novavis Group SA, you can compare the effects of market volatilities on ING Bank and Novavis Group 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 Novavis Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of ING Bank and Novavis Group.
Diversification Opportunities for ING Bank and Novavis Group
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ING and Novavis is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding ING Bank lski and Novavis Group SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Novavis Group 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 Novavis Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Novavis Group SA has no effect on the direction of ING Bank i.e., ING Bank and Novavis Group go up and down completely randomly.
Pair Corralation between ING Bank and Novavis Group
Assuming the 90 days trading horizon ING Bank lski is expected to generate 0.47 times more return on investment than Novavis Group. However, ING Bank lski is 2.12 times less risky than Novavis Group. It trades about 0.02 of its potential returns per unit of risk. Novavis Group SA is currently generating about -0.18 per unit of risk. If you would invest 25,000 in ING Bank lski on October 9, 2024 and sell it today you would earn a total of 100.00 from holding ING Bank lski or generate 0.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ING Bank lski vs. Novavis Group SA
Performance |
| Timeline |
| ING Bank lski |
| Novavis Group SA |
ING Bank and Novavis Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ING Bank and Novavis Group
The main advantage of trading using opposite ING Bank and Novavis Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ING Bank position performs unexpectedly, Novavis Group 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 Novavis Group will offset losses from the drop in Novavis Group's long position.| ING Bank vs. BNP Paribas Bank | ING Bank vs. Echo Investment SA | ING Bank vs. Inter Cars SA | ING Bank vs. Globe Trade Centre |
| Novavis Group vs. Drago entertainment SA | Novavis Group vs. Mlk Foods Public | Novavis Group vs. ING Bank lski | Novavis Group vs. Monnari Trade 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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