Correlation Between ING Bank and True Games
Can any of the company-specific risk be diversified away by investing in both ING Bank and True 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 True 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 True Games Syndicate, you can compare the effects of market volatilities on ING Bank and True 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 True Games. Check out your portfolio center. Please also check ongoing floating volatility patterns of ING Bank and True Games.
Diversification Opportunities for ING Bank and True Games
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ING and True is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding ING Bank lski and True Games Syndicate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on True Games Syndicate 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 True Games. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of True Games Syndicate has no effect on the direction of ING Bank i.e., ING Bank and True Games go up and down completely randomly.
Pair Corralation between ING Bank and True Games
Assuming the 90 days trading horizon ING Bank is expected to generate 2.45 times less return on investment than True Games. But when comparing it to its historical volatility, ING Bank lski is 3.18 times less risky than True Games. It trades about 0.06 of its potential returns per unit of risk. True Games Syndicate is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 32.00 in True Games Syndicate on August 27, 2024 and sell it today you would earn a total of 16.00 from holding True Games Syndicate or generate 50.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 87.86% |
| Values | Daily Returns |
ING Bank lski vs. True Games Syndicate
Performance |
| Timeline |
| ING Bank lski |
| True Games Syndicate |
ING Bank and True Games Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ING Bank and True Games
The main advantage of trading using opposite ING Bank and True Games positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ING Bank position performs unexpectedly, True 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 True Games will offset losses from the drop in True Games' long position.The idea behind ING Bank lski and True Games Syndicate pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| True Games vs. Clean Carbon Energy | True Games vs. ADX | True Games vs. Agroliga Group PLC | True Games vs. Vee 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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