Correlation Between Hrvatska Postanska and Institut IGH
Can any of the company-specific risk be diversified away by investing in both Hrvatska Postanska 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 Hrvatska Postanska and Institut IGH 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 Institut IGH dd, you can compare the effects of market volatilities on Hrvatska Postanska 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 Hrvatska Postanska with a short position of Institut IGH. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hrvatska Postanska and Institut IGH.
Diversification Opportunities for Hrvatska Postanska and Institut IGH
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Hrvatska and Institut is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Hrvatska Postanska Banka 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 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 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 Hrvatska Postanska i.e., Hrvatska Postanska and Institut IGH go up and down completely randomly.
Pair Corralation between Hrvatska Postanska and Institut IGH
Assuming the 90 days trading horizon Hrvatska Postanska Banka is expected to generate 0.36 times more return on investment than Institut IGH. However, Hrvatska Postanska Banka is 2.77 times less risky than Institut IGH. It trades about 0.51 of its potential returns per unit of risk. Institut IGH dd is currently generating about -0.29 per unit of risk. If you would invest 28,800 in Hrvatska Postanska Banka on September 12, 2024 and sell it today you would earn a total of 5,600 from holding Hrvatska Postanska Banka or generate 19.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 52.38% |
| Values | Daily Returns |
Hrvatska Postanska Banka vs. Institut IGH dd
Performance |
| Timeline |
| Hrvatska Postanska Banka |
| Institut IGH dd |
Hrvatska Postanska and Institut IGH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hrvatska Postanska and Institut IGH
The main advantage of trading using opposite Hrvatska Postanska and Institut IGH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hrvatska Postanska 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.| Hrvatska Postanska vs. Dalekovod dd | Hrvatska Postanska vs. Institut IGH dd | Hrvatska Postanska vs. Zagrebacka Banka dd | Hrvatska Postanska vs. Podravka Prehrambena Industrija |
| 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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