Correlation Between Lloyds Banking and ING Group
Can any of the company-specific risk be diversified away by investing in both Lloyds Banking and ING Group 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 Lloyds Banking and ING Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lloyds Banking Group and ING Group NV, you can compare the effects of market volatilities on Lloyds Banking and ING Group 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 Lloyds Banking with a short position of ING Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lloyds Banking and ING Group.
Diversification Opportunities for Lloyds Banking and ING Group
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Lloyds and ING is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Lloyds Banking Group and ING Group NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ING Group NV and Lloyds Banking 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 Lloyds Banking Group are associated (or correlated) with ING Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ING Group NV has no effect on the direction of Lloyds Banking i.e., Lloyds Banking and ING Group go up and down completely randomly.
Pair Corralation between Lloyds Banking and ING Group
Considering the 90-day investment horizon Lloyds Banking Group is expected to under-perform the ING Group. In addition to that, Lloyds Banking is 1.49 times more volatile than ING Group NV. It trades about -0.04 of its total potential returns per unit of risk. ING Group NV is currently generating about 0.02 per unit of volatility. If you would invest 2,404 in ING Group NV on June 9, 2025 and sell it today you would earn a total of 6.00 from holding ING Group NV or generate 0.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lloyds Banking Group vs. ING Group NV
Performance |
| Timeline |
| Lloyds Banking Group |
| ING Group NV |
Lloyds Banking and ING Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lloyds Banking and ING Group
The main advantage of trading using opposite Lloyds Banking and ING Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lloyds Banking position performs unexpectedly, ING Group 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 Group will offset losses from the drop in ING Group's long position.| Lloyds Banking vs. Banco Bradesco SA | Lloyds Banking vs. Itau Unibanco Banco | Lloyds Banking vs. Lloyds Banking Group | Lloyds Banking vs. Deutsche Bank AG |
| ING Group vs. Barclays PLC ADR | ING Group vs. Banco Bilbao Viscaya | ING Group vs. Banco Santander SA | ING Group vs. UBS Group AG |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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