Correlation Between Aristotle Value and Ing Series

Can any of the company-specific risk be diversified away by investing in both Aristotle Value and Ing Series 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 Aristotle Value and Ing Series into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Aristotle Value Eq and Ing Series Fund, you can compare the effects of market volatilities on Aristotle Value and Ing Series 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 Aristotle Value with a short position of Ing Series. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aristotle Value and Ing Series.

Diversification Opportunities for Aristotle Value and Ing Series

0.57

Correlation Coefficient

Aristotle Value  Ing Series

Very weak diversification

The 3 months correlation between Aristotle and Ing is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Aristotle Value Eq and Ing Series Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ing Series Fund and Aristotle Value 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 Aristotle Value Eq are associated (or correlated) with Ing Series. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ing Series Fund has no effect on the direction of Aristotle Value i.e., Aristotle Value and Ing Series go up and down completely randomly.

Pair Corralation between Aristotle Value and Ing Series

Assuming the 90 days horizon Aristotle Value is expected to generate 4.1 times less return on investment than Ing Series. But when comparing it to its historical volatility, Aristotle Value Eq is 1.34 times less risky than Ing Series. It trades about 0.01 of its potential returns per unit of risk. Ing Series Fund is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  1,183  in Ing Series Fund on October 3, 2024 and sell it today you would earn a total of  220.00  from holding Ing Series Fund or generate 18.6% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	61.02%
Values	Daily Returns

Aristotle Value Eq  vs.  Ing Series Fund

Aristotle Value Eq

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aristotle Value Eq has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Ing Series Fund

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Ing Series Fund are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental drivers, Ing Series is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Aristotle Value and Ing Series

The main advantage of trading using opposite Aristotle Value and Ing Series positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aristotle Value position performs unexpectedly, Ing Series 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 Series will offset losses from the drop in Ing Series' long position.

The idea behind Aristotle Value Eq and Ing Series Fund pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..