Correlation Between AD Plastik and Podravka Prehrambena
Can any of the company-specific risk be diversified away by investing in both AD Plastik and Podravka Prehrambena 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 Podravka Prehrambena 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 Podravka Prehrambena Industrija, you can compare the effects of market volatilities on AD Plastik and Podravka Prehrambena 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 Podravka Prehrambena. Check out your portfolio center. Please also check ongoing floating volatility patterns of AD Plastik and Podravka Prehrambena.
Diversification Opportunities for AD Plastik and Podravka Prehrambena
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ADPL and Podravka is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding AD Plastik dd and Podravka Prehrambena Industrij in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Podravka Prehrambena 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 Podravka Prehrambena. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Podravka Prehrambena has no effect on the direction of AD Plastik i.e., AD Plastik and Podravka Prehrambena go up and down completely randomly.
Pair Corralation between AD Plastik and Podravka Prehrambena
Assuming the 90 days trading horizon AD Plastik dd is expected to under-perform the Podravka Prehrambena. But the stock apears to be less risky and, when comparing its historical volatility, AD Plastik dd is 1.06 times less risky than Podravka Prehrambena. The stock trades about -0.3 of its potential returns per unit of risk. The Podravka Prehrambena Industrija is currently generating about -0.19 of returns per unit of risk over similar time horizon. If you would invest 15,300 in Podravka Prehrambena Industrija on September 12, 2024 and sell it today you would lose (1,400) from holding Podravka Prehrambena Industrija or give up 9.15% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 90.48% |
| Values | Daily Returns |
AD Plastik dd vs. Podravka Prehrambena Industrij
Performance |
| Timeline |
| AD Plastik dd |
| Podravka Prehrambena |
AD Plastik and Podravka Prehrambena Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AD Plastik and Podravka Prehrambena
The main advantage of trading using opposite AD Plastik and Podravka Prehrambena positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AD Plastik position performs unexpectedly, Podravka Prehrambena 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 Podravka Prehrambena will offset losses from the drop in Podravka Prehrambena'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 |
| Podravka Prehrambena vs. Dalekovod dd | Podravka Prehrambena vs. Institut IGH dd | Podravka Prehrambena vs. Jadroplov dd | Podravka Prehrambena vs. Zagrebacka Banka dd |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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