Correlation Between ING Groep and TKH Group
Can any of the company-specific risk be diversified away by investing in both ING Groep and TKH 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 Groep and TKH Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ING Groep NV and TKH Group NV, you can compare the effects of market volatilities on ING Groep and TKH 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 Groep with a short position of TKH Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of ING Groep and TKH Group.
Diversification Opportunities for ING Groep and TKH Group
Poor diversification
The 3 months correlation between ING and TKH is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding ING Groep NV and TKH Group NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TKH Group NV and ING Groep 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 Groep NV are associated (or correlated) with TKH Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TKH Group NV has no effect on the direction of ING Groep i.e., ING Groep and TKH Group go up and down completely randomly.
Pair Corralation between ING Groep and TKH Group
Assuming the 90 days trading horizon ING Groep NV is expected to generate 0.83 times more return on investment than TKH Group. However, ING Groep NV is 1.2 times less risky than TKH Group. It trades about 0.07 of its potential returns per unit of risk. TKH Group NV is currently generating about -0.03 per unit of risk. If you would invest 1,227 in ING Groep NV on August 28, 2024 and sell it today you would earn a total of 237.00 from holding ING Groep NV or generate 19.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ING Groep NV vs. TKH Group NV
Performance |
| Timeline |
| ING Groep NV |
| TKH Group NV |
ING Groep and TKH Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ING Groep and TKH Group
The main advantage of trading using opposite ING Groep and TKH Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ING Groep position performs unexpectedly, TKH 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 TKH Group will offset losses from the drop in TKH Group's long position.| ING Groep vs. Aegon NV | ING Groep vs. ABN Amro Group | ING Groep vs. Koninklijke Philips NV | ING Groep vs. Unilever PLC |
| TKH Group vs. Aalberts Industries NV | TKH Group vs. BE Semiconductor Industries | TKH Group vs. AMG Advanced Metallurgical | TKH Group vs. Koninklijke Vopak NV |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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