Correlation Between Movie Games and ING Bank

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

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

Diversification Opportunities for Movie Games and ING Bank

0.52

Correlation Coefficient

Movie Games  ING Bank

Very weak diversification

The 3 months correlation between Movie and ING is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Movie Games SA and ING Bank lski in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ING Bank lski and Movie Games 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 Movie Games SA are associated (or correlated) with ING Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ING Bank lski has no effect on the direction of Movie Games i.e., Movie Games and ING Bank go up and down completely randomly.

Pair Corralation between Movie Games and ING Bank

Assuming the 90 days trading horizon Movie Games is expected to generate 1.41 times less return on investment than ING Bank. In addition to that, Movie Games is 2.1 times more volatile than ING Bank lski. It trades about 0.03 of its total potential returns per unit of risk. ING Bank lski is currently generating about 0.08 per unit of volatility. If you would invest  25,550  in ING Bank lski on October 25, 2024 and sell it today you would earn a total of  2,250  from holding ING Bank lski or generate 8.81% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.25%
Values	Daily Returns

Movie Games SA  vs.  ING Bank lski

Movie Games SA

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Movie Games SA are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Movie Games may actually be approaching a critical reversion point that can send shares even higher in February 2025.

ING Bank lski

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in ING Bank lski are ranked lower than 6 (%) 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.

Pair Trading with Movie Games and ING Bank

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

The idea behind Movie Games SA and ING Bank lski 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.