Correlation Between Prudential Financial and ING Groep
Can any of the company-specific risk be diversified away by investing in both Prudential Financial and ING Groep 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 Prudential Financial and ING Groep into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Prudential Financial and ING Groep NV, you can compare the effects of market volatilities on Prudential Financial and ING Groep 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 Prudential Financial with a short position of ING Groep. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prudential Financial and ING Groep.
Diversification Opportunities for Prudential Financial and ING Groep
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Prudential and ING is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Prudential Financial and ING Groep NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ING Groep NV and Prudential Financial 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 Prudential Financial are associated (or correlated) with ING Groep. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ING Groep NV has no effect on the direction of Prudential Financial i.e., Prudential Financial and ING Groep go up and down completely randomly.
Pair Corralation between Prudential Financial and ING Groep
Assuming the 90 days trading horizon Prudential Financial is expected to generate 3.36 times less return on investment than ING Groep. But when comparing it to its historical volatility, Prudential Financial is 1.42 times less risky than ING Groep. It trades about 0.02 of its potential returns per unit of risk. ING Groep NV is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 14,736 in ING Groep NV on September 12, 2024 and sell it today you would earn a total of 9,964 from holding ING Groep NV or generate 67.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Prudential Financial vs. ING Groep NV
Performance |
| Timeline |
| Prudential Financial |
| ING Groep NV |
Prudential Financial and ING Groep Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Prudential Financial and ING Groep
The main advantage of trading using opposite Prudential Financial and ING Groep positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prudential Financial position performs unexpectedly, ING Groep 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 Groep will offset losses from the drop in ING Groep's long position.| Prudential Financial vs. The Select Sector | Prudential Financial vs. Promotora y Operadora | Prudential Financial vs. iShares Global Timber | Prudential Financial vs. SPDR Series Trust |
| ING Groep vs. First Majestic Silver | ING Groep vs. New Oriental Education | ING Groep vs. UnitedHealth Group Incorporated | ING Groep vs. The Bank of |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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