Correlation Between AD Plastik and Arena Hospitality
Can any of the company-specific risk be diversified away by investing in both AD Plastik and Arena Hospitality 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 AD Plastik and Arena Hospitality into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AD Plastik dd and Arena Hospitality Group, you can compare the effects of market volatilities on AD Plastik and Arena Hospitality 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 AD Plastik with a short position of Arena Hospitality. Check out your portfolio center. Please also check ongoing floating volatility patterns of AD Plastik and Arena Hospitality.
Diversification Opportunities for AD Plastik and Arena Hospitality
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ADPL and Arena is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding AD Plastik dd and Arena Hospitality Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arena Hospitality and AD Plastik 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 AD Plastik dd are associated (or correlated) with Arena Hospitality. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arena Hospitality has no effect on the direction of AD Plastik i.e., AD Plastik and Arena Hospitality go up and down completely randomly.
Pair Corralation between AD Plastik and Arena Hospitality
Assuming the 90 days trading horizon AD Plastik dd is expected to generate 2.18 times more return on investment than Arena Hospitality. However, AD Plastik is 2.18 times more volatile than Arena Hospitality Group. It trades about -0.08 of its potential returns per unit of risk. Arena Hospitality Group is currently generating about -0.2 per unit of risk. If you would invest 950.00 in AD Plastik dd on October 20, 2024 and sell it today you would lose (30.00) from holding AD Plastik dd or give up 3.16% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 75.0% |
| Values | Daily Returns |
AD Plastik dd vs. Arena Hospitality Group
Performance |
| Timeline |
| AD Plastik dd |
| Arena Hospitality |
AD Plastik and Arena Hospitality Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AD Plastik and Arena Hospitality
The main advantage of trading using opposite AD Plastik and Arena Hospitality positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AD Plastik position performs unexpectedly, Arena Hospitality 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 Arena Hospitality will offset losses from the drop in Arena Hospitality's long position.| AD Plastik vs. Dalekovod dd | AD Plastik vs. Institut IGH dd | AD Plastik vs. Jadroplov dd | AD Plastik vs. Zagrebacka Banka dd |
| Arena Hospitality vs. AD Plastik dd | Arena Hospitality vs. Hrvatska Postanska Banka | Arena Hospitality vs. Dalekovod dd | Arena Hospitality vs. Podravka Prehrambena Industrija |
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.
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