Correlation Between Select Sector and ING Groep
Can any of the company-specific risk be diversified away by investing in both Select Sector 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 Select Sector and ING Groep into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Select Sector and ING Groep NV, you can compare the effects of market volatilities on Select Sector 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 Select Sector with a short position of ING Groep. Check out your portfolio center. Please also check ongoing floating volatility patterns of Select Sector and ING Groep.
Diversification Opportunities for Select Sector and ING Groep
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Select and ING is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding The Select Sector 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 Select Sector 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 The Select Sector 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 Select Sector i.e., Select Sector and ING Groep go up and down completely randomly.
Pair Corralation between Select Sector and ING Groep
If you would invest 157,500 in The Select Sector on September 4, 2024 and sell it today you would earn a total of 8,680 from holding The Select Sector or generate 5.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
The Select Sector vs. ING Groep NV
Performance |
| Timeline |
| Select Sector |
| ING Groep NV |
Select Sector and ING Groep Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Select Sector and ING Groep
The main advantage of trading using opposite Select Sector and ING Groep positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Select Sector 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.| Select Sector vs. Vanguard Index Funds | Select Sector vs. Vanguard Index Funds | Select Sector vs. Vanguard STAR Funds | Select Sector vs. SPDR SP 500 |
| ING Groep vs. Southwest Airlines | ING Groep vs. Grupo Sports World | ING Groep vs. Prudential Financial | ING Groep vs. Taiwan Semiconductor Manufacturing |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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