Correlation Between Hrvatska Postanska and Arena Hospitality
Can any of the company-specific risk be diversified away by investing in both Hrvatska Postanska 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 Hrvatska Postanska and Arena Hospitality into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hrvatska Postanska Banka and Arena Hospitality Group, you can compare the effects of market volatilities on Hrvatska Postanska 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 Hrvatska Postanska with a short position of Arena Hospitality. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hrvatska Postanska and Arena Hospitality.
Diversification Opportunities for Hrvatska Postanska and Arena Hospitality
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Hrvatska and Arena is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Hrvatska Postanska Banka and Arena Hospitality Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arena Hospitality and Hrvatska Postanska 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 Hrvatska Postanska Banka 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 Hrvatska Postanska i.e., Hrvatska Postanska and Arena Hospitality go up and down completely randomly.
Pair Corralation between Hrvatska Postanska and Arena Hospitality
Assuming the 90 days trading horizon Hrvatska Postanska is expected to generate 2.6 times less return on investment than Arena Hospitality. But when comparing it to its historical volatility, Hrvatska Postanska Banka is 1.42 times less risky than Arena Hospitality. It trades about 0.14 of its potential returns per unit of risk. Arena Hospitality Group is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 3,140 in Arena Hospitality Group on November 2, 2024 and sell it today you would earn a total of 180.00 from holding Arena Hospitality Group or generate 5.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 84.21% |
| Values | Daily Returns |
Hrvatska Postanska Banka vs. Arena Hospitality Group
Performance |
| Timeline |
| Hrvatska Postanska Banka |
| Arena Hospitality |
Hrvatska Postanska and Arena Hospitality Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hrvatska Postanska and Arena Hospitality
The main advantage of trading using opposite Hrvatska Postanska and Arena Hospitality positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hrvatska Postanska 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.| Hrvatska Postanska vs. Dalekovod dd | Hrvatska Postanska vs. Institut IGH dd | Hrvatska Postanska vs. INA Industrija Nafte dd | Hrvatska Postanska vs. Jadroplov dd |
| Arena Hospitality vs. Dalekovod dd | Arena Hospitality vs. INA Industrija Nafte dd | Arena Hospitality vs. Zagrebacka Banka 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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