Correlation Between ING Groep and National Australia
Can any of the company-specific risk be diversified away by investing in both ING Groep and National Australia 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 National Australia 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 National Australia Bank, you can compare the effects of market volatilities on ING Groep and National Australia 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 National Australia. Check out your portfolio center. Please also check ongoing floating volatility patterns of ING Groep and National Australia.
Diversification Opportunities for ING Groep and National Australia
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ING and National is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding ING Groep NV and National Australia Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Australia Bank 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 National Australia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Australia Bank has no effect on the direction of ING Groep i.e., ING Groep and National Australia go up and down completely randomly.
Pair Corralation between ING Groep and National Australia
Assuming the 90 days horizon ING Groep NV is expected to generate 1.22 times more return on investment than National Australia. However, ING Groep is 1.22 times more volatile than National Australia Bank. It trades about 0.0 of its potential returns per unit of risk. National Australia Bank is currently generating about -0.28 per unit of risk. If you would invest 1,607 in ING Groep NV on September 13, 2024 and sell it today you would lose (11.00) from holding ING Groep NV or give up 0.68% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 90.48% |
| Values | Daily Returns |
ING Groep NV vs. National Australia Bank
Performance |
| Timeline |
| ING Groep NV |
| National Australia Bank |
ING Groep and National Australia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ING Groep and National Australia
The main advantage of trading using opposite ING Groep and National Australia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ING Groep position performs unexpectedly, National Australia 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 National Australia will offset losses from the drop in National Australia's long position.| ING Groep vs. Bank of America | ING Groep vs. Citigroup | ING Groep vs. Wells Fargo | ING Groep vs. Toronto Dominion Bank |
| National Australia vs. National Australia Bank | National Australia vs. China Construction Bank | National Australia vs. Bank of America | National Australia vs. ANZ Group Holdings |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
Other Complementary Tools
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments |