Correlation Between UBS Group and ING Groep
Can any of the company-specific risk be diversified away by investing in both UBS Group 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 UBS Group and ING Groep into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between UBS Group AG and ING Groep NV, you can compare the effects of market volatilities on UBS Group 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 UBS Group with a short position of ING Groep. Check out your portfolio center. Please also check ongoing floating volatility patterns of UBS Group and ING Groep.
Diversification Opportunities for UBS Group and ING Groep
Pay attention - limited upside
The 3 months correlation between UBS and ING is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding UBS Group AG 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 UBS Group 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 UBS Group AG 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 UBS Group i.e., UBS Group and ING Groep go up and down completely randomly.
Pair Corralation between UBS Group and ING Groep
Assuming the 90 days trading horizon UBS Group AG is expected to generate 6.58 times more return on investment than ING Groep. However, UBS Group is 6.58 times more volatile than ING Groep NV. It trades about 0.1 of its potential returns per unit of risk. ING Groep NV is currently generating about 0.09 per unit of risk. If you would invest 54,601 in UBS Group AG on September 3, 2024 and sell it today you would earn a total of 10,648 from holding UBS Group AG or generate 19.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
UBS Group AG vs. ING Groep NV
Performance |
| Timeline |
| UBS Group AG |
| ING Groep NV |
UBS Group and ING Groep Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UBS Group and ING Groep
The main advantage of trading using opposite UBS Group and ING Groep positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UBS Group 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.| UBS Group vs. HSBC Holdings plc | UBS Group vs. Barclays PLC | UBS Group vs. The Select Sector | UBS Group vs. Promotora y Operadora |
| ING Groep vs. HSBC Holdings plc | ING Groep vs. Barclays PLC | ING Groep vs. The Select Sector | ING Groep vs. Promotora y Operadora |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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