Correlation Between ING Bank and Gielda Praw
Can any of the company-specific risk be diversified away by investing in both ING Bank and Gielda Praw 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 Gielda Praw 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 Gielda Praw Majatkowych, you can compare the effects of market volatilities on ING Bank and Gielda Praw 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 Gielda Praw. Check out your portfolio center. Please also check ongoing floating volatility patterns of ING Bank and Gielda Praw.
Diversification Opportunities for ING Bank and Gielda Praw
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ING and Gielda is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding ING Bank lski and Gielda Praw Majatkowych in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gielda Praw Majatkowych 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 Gielda Praw. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gielda Praw Majatkowych has no effect on the direction of ING Bank i.e., ING Bank and Gielda Praw go up and down completely randomly.
Pair Corralation between ING Bank and Gielda Praw
Assuming the 90 days trading horizon ING Bank is expected to generate 1.0 times less return on investment than Gielda Praw. But when comparing it to its historical volatility, ING Bank lski is 1.26 times less risky than Gielda Praw. It trades about 0.06 of its potential returns per unit of risk. Gielda Praw Majatkowych is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 696.00 in Gielda Praw Majatkowych on September 12, 2024 and sell it today you would earn a total of 244.00 from holding Gielda Praw Majatkowych or generate 35.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.72% |
| Values | Daily Returns |
ING Bank lski vs. Gielda Praw Majatkowych
Performance |
| Timeline |
| ING Bank lski |
| Gielda Praw Majatkowych |
ING Bank and Gielda Praw Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ING Bank and Gielda Praw
The main advantage of trading using opposite ING Bank and Gielda Praw positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ING Bank position performs unexpectedly, Gielda Praw 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 Gielda Praw will offset losses from the drop in Gielda Praw's long position.The idea behind ING Bank lski and Gielda Praw Majatkowych 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.| Gielda Praw vs. Bank Millennium SA | Gielda Praw vs. ING Bank lski | Gielda Praw vs. PZ Cormay SA | Gielda Praw vs. MCI Management 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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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