Correlation Between Arena Hospitality and Zagrebacka Banka
Can any of the company-specific risk be diversified away by investing in both Arena Hospitality and Zagrebacka Banka 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 Arena Hospitality and Zagrebacka Banka into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Arena Hospitality Group and Zagrebacka Banka dd, you can compare the effects of market volatilities on Arena Hospitality and Zagrebacka Banka 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 Arena Hospitality with a short position of Zagrebacka Banka. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arena Hospitality and Zagrebacka Banka.
Diversification Opportunities for Arena Hospitality and Zagrebacka Banka
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Arena and Zagrebacka is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Arena Hospitality Group and Zagrebacka Banka dd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zagrebacka Banka and Arena Hospitality 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 Arena Hospitality Group are associated (or correlated) with Zagrebacka Banka. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zagrebacka Banka has no effect on the direction of Arena Hospitality i.e., Arena Hospitality and Zagrebacka Banka go up and down completely randomly.
Pair Corralation between Arena Hospitality and Zagrebacka Banka
Assuming the 90 days trading horizon Arena Hospitality Group is expected to under-perform the Zagrebacka Banka. But the stock apears to be less risky and, when comparing its historical volatility, Arena Hospitality Group is 1.66 times less risky than Zagrebacka Banka. The stock trades about -0.2 of its potential returns per unit of risk. The Zagrebacka Banka dd is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 2,790 in Zagrebacka Banka dd on October 20, 2024 and sell it today you would earn a total of 210.00 from holding Zagrebacka Banka dd or generate 7.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 75.0% |
| Values | Daily Returns |
Arena Hospitality Group vs. Zagrebacka Banka dd
Performance |
| Timeline |
| Arena Hospitality |
| Zagrebacka Banka |
Arena Hospitality and Zagrebacka Banka Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arena Hospitality and Zagrebacka Banka
The main advantage of trading using opposite Arena Hospitality and Zagrebacka Banka positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arena Hospitality position performs unexpectedly, Zagrebacka Banka 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 Zagrebacka Banka will offset losses from the drop in Zagrebacka Banka's long position.| Arena Hospitality vs. AD Plastik dd | Arena Hospitality vs. Hrvatska Postanska Banka | Arena Hospitality vs. Dalekovod dd | Arena Hospitality vs. Podravka Prehrambena Industrija |
| Zagrebacka Banka vs. Hrvatska Postanska Banka | Zagrebacka Banka vs. AD Plastik dd | Zagrebacka Banka vs. Dalekovod dd | Zagrebacka Banka 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 Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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