Correlation Between Europac Gold and Ing Intermediate
Can any of the company-specific risk be diversified away by investing in both Europac Gold and Ing Intermediate 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 Europac Gold and Ing Intermediate into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Europac Gold Fund and Ing Intermediate Bond, you can compare the effects of market volatilities on Europac Gold and Ing Intermediate 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 Europac Gold with a short position of Ing Intermediate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Europac Gold and Ing Intermediate.
Diversification Opportunities for Europac Gold and Ing Intermediate
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Europac and Ing is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Europac Gold Fund and Ing Intermediate Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ing Intermediate Bond and Europac Gold 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 Europac Gold Fund are associated (or correlated) with Ing Intermediate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ing Intermediate Bond has no effect on the direction of Europac Gold i.e., Europac Gold and Ing Intermediate go up and down completely randomly.
Pair Corralation between Europac Gold and Ing Intermediate
Assuming the 90 days horizon Europac Gold Fund is expected to generate 6.44 times more return on investment than Ing Intermediate. However, Europac Gold is 6.44 times more volatile than Ing Intermediate Bond. It trades about 0.06 of its potential returns per unit of risk. Ing Intermediate Bond is currently generating about -0.04 per unit of risk. If you would invest 1,047 in Europac Gold Fund on September 2, 2024 and sell it today you would earn a total of 66.00 from holding Europac Gold Fund or generate 6.3% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Europac Gold Fund vs. Ing Intermediate Bond
Performance |
Timeline |
Europac Gold |
Ing Intermediate Bond |
Europac Gold and Ing Intermediate Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Europac Gold and Ing Intermediate
The main advantage of trading using opposite Europac Gold and Ing Intermediate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Europac Gold position performs unexpectedly, Ing Intermediate 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 Intermediate will offset losses from the drop in Ing Intermediate's long position.Europac Gold vs. Europac International Value | Europac Gold vs. Europac International Dividend | Europac Gold vs. Ep Emerging Markets | Europac Gold vs. Europac International Bond |
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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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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