Correlation Between ING Bank and Polski Koncern
Can any of the company-specific risk be diversified away by investing in both ING Bank and Polski Koncern 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 Polski Koncern 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 Polski Koncern Naftowy, you can compare the effects of market volatilities on ING Bank and Polski Koncern 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 Polski Koncern. Check out your portfolio center. Please also check ongoing floating volatility patterns of ING Bank and Polski Koncern.
Diversification Opportunities for ING Bank and Polski Koncern
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ING and Polski is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding ING Bank lski and Polski Koncern Naftowy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Polski Koncern Naftowy 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 Polski Koncern. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Polski Koncern Naftowy has no effect on the direction of ING Bank i.e., ING Bank and Polski Koncern go up and down completely randomly.
Pair Corralation between ING Bank and Polski Koncern
Assuming the 90 days trading horizon ING Bank lski is expected to generate 1.11 times more return on investment than Polski Koncern. However, ING Bank is 1.11 times more volatile than Polski Koncern Naftowy. It trades about 0.02 of its potential returns per unit of risk. Polski Koncern Naftowy is currently generating about -0.06 per unit of risk. If you would invest 26,200 in ING Bank lski on October 18, 2024 and sell it today you would earn a total of 500.00 from holding ING Bank lski or generate 1.91% 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. Polski Koncern Naftowy
Performance |
| Timeline |
| ING Bank lski |
| Polski Koncern Naftowy |
ING Bank and Polski Koncern Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ING Bank and Polski Koncern
The main advantage of trading using opposite ING Bank and Polski Koncern positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ING Bank position performs unexpectedly, Polski Koncern 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 Polski Koncern will offset losses from the drop in Polski Koncern's long position.| ING Bank vs. Noble Financials SA | ING Bank vs. Centrum Finansowe Banku | ING Bank vs. Movie Games SA | ING Bank vs. Enter Air 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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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