Correlation Between ING Bank and Poznanska Korporacja

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

By analyzing existing cross correlation between ING Bank lski and Poznanska Korporacja Budowlana, you can compare the effects of market volatilities on ING Bank and Poznanska Korporacja 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 ING Bank with a short position of Poznanska Korporacja. Check out your portfolio center. Please also check ongoing floating volatility patterns of ING Bank and Poznanska Korporacja.

Diversification Opportunities for ING Bank and Poznanska Korporacja

0.39

Correlation Coefficient

ING Bank  Poznanska Korporacja

Weak diversification

The 3 months correlation between ING and Poznanska is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding ING Bank lski and Poznanska Korporacja Budowlana in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Poznanska Korporacja and ING Bank 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 ING Bank lski are associated (or correlated) with Poznanska Korporacja. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Poznanska Korporacja has no effect on the direction of ING Bank i.e., ING Bank and Poznanska Korporacja go up and down completely randomly.

Pair Corralation between ING Bank and Poznanska Korporacja

Assuming the 90 days trading horizon ING Bank lski is expected to generate 0.97 times more return on investment than Poznanska Korporacja. However, ING Bank lski is 1.03 times less risky than Poznanska Korporacja. It trades about -0.03 of its potential returns per unit of risk. Poznanska Korporacja Budowlana is currently generating about -0.03 per unit of risk. If you would invest  26,250  in ING Bank lski on October 9, 2024 and sell it today you would lose (1,150) from holding ING Bank lski or give up 4.38% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

ING Bank lski  vs.  Poznanska Korporacja Budowlana

ING Bank lski

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ING Bank lski has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, ING Bank is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Poznanska Korporacja

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Poznanska Korporacja Budowlana has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Poznanska Korporacja is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with ING Bank and Poznanska Korporacja

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

The idea behind ING Bank lski and Poznanska Korporacja Budowlana 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 Commodity Directory module to find actively traded commodities issued by global exchanges.