Correlation Between Quantum Software and ING Bank

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

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

Diversification Opportunities for Quantum Software and ING Bank

-0.16

Correlation Coefficient

Quantum Software  ING Bank

Good diversification

The 3 months correlation between Quantum and ING is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Quantum Software 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 Quantum Software 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 Quantum Software 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 Quantum Software i.e., Quantum Software and ING Bank go up and down completely randomly.

Pair Corralation between Quantum Software and ING Bank

Assuming the 90 days trading horizon Quantum Software is expected to generate 1.85 times less return on investment than ING Bank. In addition to that, Quantum Software is 2.55 times more volatile than ING Bank lski. It trades about 0.01 of its total potential returns per unit of risk. ING Bank lski is currently generating about 0.06 per unit of volatility. If you would invest  15,226  in ING Bank lski on September 29, 2024 and sell it today you would earn a total of  9,024  from holding ING Bank lski or generate 59.27% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	90.49%
Values	Daily Returns

Quantum Software SA  vs.  ING Bank lski

Quantum Software

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Quantum Software SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

ING Bank lski

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ING Bank lski has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest weak performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Pair Trading with Quantum Software and ING Bank

The main advantage of trading using opposite Quantum Software and ING Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Quantum Software 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 Quantum Software 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.

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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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.