Correlation Between ING Bank and Powszechny Zaklad

Can any of the company-specific risk be diversified away by investing in both ING Bank and Powszechny Zaklad 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 Powszechny Zaklad 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 Powszechny Zaklad Ubezpieczen, you can compare the effects of market volatilities on ING Bank and Powszechny Zaklad 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 Powszechny Zaklad. Check out your portfolio center. Please also check ongoing floating volatility patterns of ING Bank and Powszechny Zaklad.

Diversification Opportunities for ING Bank and Powszechny Zaklad

0.01

Correlation Coefficient

ING Bank  Powszechny Zaklad

Significant diversification

The 3 months correlation between ING and Powszechny is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding ING Bank lski and Powszechny Zaklad Ubezpieczen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Powszechny Zaklad 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 Powszechny Zaklad. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Powszechny Zaklad has no effect on the direction of ING Bank i.e., ING Bank and Powszechny Zaklad go up and down completely randomly.

Pair Corralation between ING Bank and Powszechny Zaklad

Assuming the 90 days trading horizon ING Bank lski is expected to generate 1.54 times more return on investment than Powszechny Zaklad. However, ING Bank is 1.54 times more volatile than Powszechny Zaklad Ubezpieczen. It trades about 0.49 of its potential returns per unit of risk. Powszechny Zaklad Ubezpieczen is currently generating about 0.48 per unit of risk. If you would invest  24,300  in ING Bank lski on October 23, 2024 and sell it today you would earn a total of  2,950  from holding ING Bank lski or generate 12.14% return on investment over 90 days.

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

ING Bank lski  vs.  Powszechny Zaklad Ubezpieczen

ING Bank lski

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in ING Bank lski are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, ING Bank may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Powszechny Zaklad

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Powszechny Zaklad Ubezpieczen are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Powszechny Zaklad reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ING Bank and Powszechny Zaklad

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

The idea behind ING Bank lski and Powszechny Zaklad Ubezpieczen 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.