Correlation Between Credit Suisse and ING Group

Can any of the company-specific risk be diversified away by investing in both Credit Suisse 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 Credit Suisse and ING Group into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Credit Suisse Group and ING Group NV, you can compare the effects of market volatilities on Credit Suisse 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 Credit Suisse with a short position of ING Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Credit Suisse and ING Group.

Diversification Opportunities for Credit Suisse and ING Group

0.54

Correlation Coefficient

Credit Suisse  ING Group

Very weak diversification

The 3 months correlation between Credit and ING is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Credit Suisse Group 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 Credit Suisse 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 Credit Suisse Group 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 Credit Suisse i.e., Credit Suisse and ING Group go up and down completely randomly.

Pair Corralation between Credit Suisse and ING Group

If you would invest  1,552  in ING Group NV on October 15, 2024 and sell it today you would earn a total of  3.00  from holding ING Group NV or generate 0.19% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	5.56%
Values	Daily Returns

Credit Suisse Group  vs.  ING Group NV

Credit Suisse Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Credit Suisse Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Credit Suisse is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

ING Group NV

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ING Group NV has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Credit Suisse and ING Group

The main advantage of trading using opposite Credit Suisse and ING Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Credit Suisse 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.

The idea behind Credit Suisse Group and ING Group NV 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.

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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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.