Correlation Between MBank SA and ING Bank
Can any of the company-specific risk be diversified away by investing in both MBank SA and ING Bank 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 MBank SA and ING Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between mBank SA and ING Bank lski, you can compare the effects of market volatilities on MBank SA and ING Bank 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 MBank SA with a short position of ING Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of MBank SA and ING Bank.
Diversification Opportunities for MBank SA and ING Bank
Poor diversification
The 3 months correlation between MBank and ING is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding mBank SA and ING Bank lski in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ING Bank lski and MBank SA 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 mBank SA are associated (or correlated) with ING Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ING Bank lski has no effect on the direction of MBank SA i.e., MBank SA and ING Bank go up and down completely randomly.
Pair Corralation between MBank SA and ING Bank
Assuming the 90 days trading horizon mBank SA is expected to under-perform the ING Bank. In addition to that, MBank SA is 1.37 times more volatile than ING Bank lski. It trades about -0.16 of its total potential returns per unit of risk. ING Bank lski is currently generating about -0.17 per unit of volatility. If you would invest 25,950 in ING Bank lski on August 24, 2024 and sell it today you would lose (1,500) from holding ING Bank lski or give up 5.78% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
mBank SA vs. ING Bank lski
Performance |
| Timeline |
| mBank SA |
| ING Bank lski |
MBank SA and ING Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MBank SA and ING Bank
The main advantage of trading using opposite MBank SA and ING Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MBank SA position performs unexpectedly, ING Bank 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 ING Bank will offset losses from the drop in ING Bank's long position.| MBank SA vs. Noble Financials SA | MBank SA vs. Movie Games SA | MBank SA vs. GreenX Metals | MBank SA vs. SOFTWARE MANSION SPOLKA |
| ING Bank vs. UniCredit SpA | ING Bank vs. Santander Bank Polska | ING Bank vs. Bank Polska Kasa | ING Bank vs. mBank 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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