Correlation Between Sumitomo Mitsui and ING Group
Can any of the company-specific risk be diversified away by investing in both Sumitomo Mitsui and ING 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 Sumitomo Mitsui and ING Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sumitomo Mitsui Financial and ING Group NV, you can compare the effects of market volatilities on Sumitomo Mitsui and ING 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 Sumitomo Mitsui with a short position of ING Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sumitomo Mitsui and ING Group.
Diversification Opportunities for Sumitomo Mitsui and ING Group
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sumitomo and ING is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Sumitomo Mitsui Financial and ING Group NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ING Group NV and Sumitomo Mitsui 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 Sumitomo Mitsui Financial are associated (or correlated) with ING Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ING Group NV has no effect on the direction of Sumitomo Mitsui i.e., Sumitomo Mitsui and ING Group go up and down completely randomly.
Pair Corralation between Sumitomo Mitsui and ING Group
Given the investment horizon of 90 days Sumitomo Mitsui is expected to generate 2.62 times less return on investment than ING Group. In addition to that, Sumitomo Mitsui is 1.3 times more volatile than ING Group NV. It trades about 0.05 of its total potential returns per unit of risk. ING Group NV is currently generating about 0.18 per unit of volatility. If you would invest 1,561 in ING Group NV on November 9, 2024 and sell it today you would earn a total of 86.00 from holding ING Group NV or generate 5.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sumitomo Mitsui Financial vs. ING Group NV
Performance |
| Timeline |
| Sumitomo Mitsui Financial |
| ING Group NV |
Sumitomo Mitsui and ING Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sumitomo Mitsui and ING Group
The main advantage of trading using opposite Sumitomo Mitsui and ING Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sumitomo Mitsui position performs unexpectedly, ING 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 ING Group will offset losses from the drop in ING Group's long position.| Sumitomo Mitsui vs. Barclays PLC ADR | Sumitomo Mitsui vs. Mitsubishi UFJ Financial | Sumitomo Mitsui vs. ING Group NV | Sumitomo Mitsui vs. HSBC Holdings PLC |
| ING Group vs. Natwest Group PLC | ING Group vs. HSBC Holdings PLC | ING Group vs. Banco Santander SA | ING Group vs. UBS Group AG |
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.
Other Complementary Tools
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine |