Correlation Between SOFTWARE MANSION and ING Bank
Can any of the company-specific risk be diversified away by investing in both SOFTWARE MANSION 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 SOFTWARE MANSION and ING Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SOFTWARE MANSION SPOLKA and ING Bank lski, you can compare the effects of market volatilities on SOFTWARE MANSION 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 SOFTWARE MANSION with a short position of ING Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of SOFTWARE MANSION and ING Bank.
Diversification Opportunities for SOFTWARE MANSION and ING Bank
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SOFTWARE and ING is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding SOFTWARE MANSION SPOLKA 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 SOFTWARE MANSION 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 SOFTWARE MANSION SPOLKA 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 SOFTWARE MANSION i.e., SOFTWARE MANSION and ING Bank go up and down completely randomly.
Pair Corralation between SOFTWARE MANSION and ING Bank
Assuming the 90 days trading horizon SOFTWARE MANSION is expected to generate 1.15 times less return on investment than ING Bank. In addition to that, SOFTWARE MANSION is 2.06 times more volatile than ING Bank lski. It trades about 0.02 of its total potential returns per unit of risk. ING Bank lski is currently generating about 0.06 per unit of volatility. If you would invest 14,105 in ING Bank lski on August 30, 2024 and sell it today you would earn a total of 8,595 from holding ING Bank lski or generate 60.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 51.01% |
| Values | Daily Returns |
SOFTWARE MANSION SPOLKA vs. ING Bank lski
Performance |
| Timeline |
| SOFTWARE MANSION SPOLKA |
| ING Bank lski |
SOFTWARE MANSION and ING Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SOFTWARE MANSION and ING Bank
The main advantage of trading using opposite SOFTWARE MANSION and ING Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SOFTWARE MANSION 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.| SOFTWARE MANSION vs. Quantum Software SA | SOFTWARE MANSION vs. Creotech Instruments SA | SOFTWARE MANSION vs. New Tech Venture | SOFTWARE MANSION vs. Intersport Polska SA |
| ING Bank vs. Logintrade SA | ING Bank vs. True Games Syndicate | ING Bank vs. Detalion Games SA | ING Bank vs. Carlson Investments 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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