Correlation Between 456837AQ6 and Rocky Mountain

Can any of the company-specific risk be diversified away by investing in both 456837AQ6 and Rocky Mountain 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 456837AQ6 and Rocky Mountain into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between ING GROEP NV and Rocky Mountain Chocolate, you can compare the effects of market volatilities on 456837AQ6 and Rocky Mountain 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 456837AQ6 with a short position of Rocky Mountain. Check out your portfolio center. Please also check ongoing floating volatility patterns of 456837AQ6 and Rocky Mountain.

Diversification Opportunities for 456837AQ6 and Rocky Mountain

-0.71

Correlation Coefficient

456837AQ6  Rocky Mountain

Pay attention - limited upside

The 3 months correlation between 456837AQ6 and Rocky is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding ING GROEP NV and Rocky Mountain Chocolate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rocky Mountain Chocolate and 456837AQ6 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 GROEP NV are associated (or correlated) with Rocky Mountain. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rocky Mountain Chocolate has no effect on the direction of 456837AQ6 i.e., 456837AQ6 and Rocky Mountain go up and down completely randomly.

Pair Corralation between 456837AQ6 and Rocky Mountain

Assuming the 90 days trading horizon ING GROEP NV is expected to generate 0.11 times more return on investment than Rocky Mountain. However, ING GROEP NV is 8.79 times less risky than Rocky Mountain. It trades about -0.1 of its potential returns per unit of risk. Rocky Mountain Chocolate is currently generating about -0.24 per unit of risk. If you would invest  9,577  in ING GROEP NV on December 26, 2024 and sell it today you would lose (251.00) from holding ING GROEP NV or give up 2.62% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	86.67%
Values	Daily Returns

ING GROEP NV  vs.  Rocky Mountain Chocolate

ING GROEP NV

Risk-Adjusted Performance

Very Weak

Over the last 90 days ING GROEP NV has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 456837AQ6 is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Rocky Mountain Chocolate

Risk-Adjusted Performance

Very Weak

Over the last 90 days Rocky Mountain Chocolate has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's fundamental indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with 456837AQ6 and Rocky Mountain

The main advantage of trading using opposite 456837AQ6 and Rocky Mountain positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 456837AQ6 position performs unexpectedly, Rocky Mountain 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 Rocky Mountain will offset losses from the drop in Rocky Mountain's long position.

The idea behind ING GROEP NV and Rocky Mountain Chocolate 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.