Correlation Between ING Group and Aquagold International

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

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

Diversification Opportunities for ING Group and Aquagold International

0.47

Correlation Coefficient

ING Group  Aquagold International

Very weak diversification

The 3 months correlation between ING and Aquagold is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding ING Group NV and Aquagold International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aquagold International and ING Group 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 Group NV are associated (or correlated) with Aquagold International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aquagold International has no effect on the direction of ING Group i.e., ING Group and Aquagold International go up and down completely randomly.

Pair Corralation between ING Group and Aquagold International

If you would invest  1,627  in ING Group NV on February 6, 2024 and sell it today you would earn a total of  91.00  from holding ING Group NV or generate 5.59% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	95.24%
Values	Daily Returns

ING Group NV  vs.  Aquagold International

ING Group NV

Risk-Adjusted Performance

27 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in ING Group NV are ranked lower than 27 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, ING Group reported solid returns over the last few months and may actually be approaching a breakup point.

Aquagold International

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Aquagold International are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak basic indicators, Aquagold International demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ING Group and Aquagold International

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

The idea behind ING Group NV and Aquagold International 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 Transaction History module to view history of all your transactions and understand their impact on performance.