Correlation Between AD Plastik and Dalekovod
Can any of the company-specific risk be diversified away by investing in both AD Plastik and Dalekovod 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 Dalekovod 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 Dalekovod dd, you can compare the effects of market volatilities on AD Plastik and Dalekovod 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 Dalekovod. Check out your portfolio center. Please also check ongoing floating volatility patterns of AD Plastik and Dalekovod.
Diversification Opportunities for AD Plastik and Dalekovod
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ADPL and Dalekovod is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding AD Plastik dd and Dalekovod dd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dalekovod dd 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 Dalekovod. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dalekovod dd has no effect on the direction of AD Plastik i.e., AD Plastik and Dalekovod go up and down completely randomly.
Pair Corralation between AD Plastik and Dalekovod
Assuming the 90 days trading horizon AD Plastik dd is expected to under-perform the Dalekovod. But the stock apears to be less risky and, when comparing its historical volatility, AD Plastik dd is 1.32 times less risky than Dalekovod. The stock trades about -0.08 of its potential returns per unit of risk. The Dalekovod dd is currently generating about 0.49 of returns per unit of risk over similar time horizon. If you would invest 344.00 in Dalekovod dd on October 20, 2024 and sell it today you would earn a total of 90.00 from holding Dalekovod dd or generate 26.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.12% |
| Values | Daily Returns |
AD Plastik dd vs. Dalekovod dd
Performance |
| Timeline |
| AD Plastik dd |
| Dalekovod dd |
AD Plastik and Dalekovod Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AD Plastik and Dalekovod
The main advantage of trading using opposite AD Plastik and Dalekovod positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AD Plastik position performs unexpectedly, Dalekovod 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 Dalekovod will offset losses from the drop in Dalekovod'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 |
| Dalekovod vs. Institut IGH dd | Dalekovod vs. Jadroplov dd | Dalekovod vs. Zagrebacka Banka dd | Dalekovod 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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