Correlation Between AD Plastik and Institut IGH
Can any of the company-specific risk be diversified away by investing in both AD Plastik and Institut IGH 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 Institut IGH 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 Institut IGH dd, you can compare the effects of market volatilities on AD Plastik and Institut IGH 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 Institut IGH. Check out your portfolio center. Please also check ongoing floating volatility patterns of AD Plastik and Institut IGH.
Diversification Opportunities for AD Plastik and Institut IGH
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ADPL and Institut is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding AD Plastik dd and Institut IGH dd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Institut IGH 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 Institut IGH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Institut IGH dd has no effect on the direction of AD Plastik i.e., AD Plastik and Institut IGH go up and down completely randomly.
Pair Corralation between AD Plastik and Institut IGH
Assuming the 90 days trading horizon AD Plastik dd is expected to generate 0.42 times more return on investment than Institut IGH. However, AD Plastik dd is 2.36 times less risky than Institut IGH. It trades about -0.22 of its potential returns per unit of risk. Institut IGH dd is currently generating about -0.28 per unit of risk. If you would invest 1,080 in AD Plastik dd on September 13, 2024 and sell it today you would lose (86.00) from holding AD Plastik dd or give up 7.96% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 63.16% |
| Values | Daily Returns |
AD Plastik dd vs. Institut IGH dd
Performance |
| Timeline |
| AD Plastik dd |
| Institut IGH dd |
AD Plastik and Institut IGH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AD Plastik and Institut IGH
The main advantage of trading using opposite AD Plastik and Institut IGH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AD Plastik position performs unexpectedly, Institut IGH 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 Institut IGH will offset losses from the drop in Institut IGH's long position.| AD Plastik vs. Hrvatska Postanska Banka | AD Plastik vs. Dalekovod dd | AD Plastik vs. Podravka Prehrambena Industrija | AD Plastik vs. Adris Grupa dd |
| Institut IGH vs. AD Plastik dd | Institut IGH vs. Hrvatska Postanska Banka | Institut IGH vs. Dalekovod dd | Institut IGH 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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