Correlation Between Hrvatska Postanska and Podravka Prehrambena
Can any of the company-specific risk be diversified away by investing in both Hrvatska Postanska 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 Hrvatska Postanska and Podravka Prehrambena 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 Podravka Prehrambena Industrija, you can compare the effects of market volatilities on Hrvatska Postanska 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 Hrvatska Postanska with a short position of Podravka Prehrambena. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hrvatska Postanska and Podravka Prehrambena.
Diversification Opportunities for Hrvatska Postanska and Podravka Prehrambena
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Hrvatska and Podravka is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Hrvatska Postanska Banka and Podravka Prehrambena Industrij in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Podravka Prehrambena 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 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 Hrvatska Postanska i.e., Hrvatska Postanska and Podravka Prehrambena go up and down completely randomly.
Pair Corralation between Hrvatska Postanska and Podravka Prehrambena
Assuming the 90 days trading horizon Hrvatska Postanska Banka is expected to generate 0.68 times more return on investment than Podravka Prehrambena. However, Hrvatska Postanska Banka is 1.47 times less risky than Podravka Prehrambena. It trades about 0.49 of its potential returns per unit of risk. Podravka Prehrambena Industrija is currently generating about -0.07 per unit of risk. If you would invest 29,000 in Hrvatska Postanska Banka on September 13, 2024 and sell it today you would earn a total of 5,400 from holding Hrvatska Postanska Banka or generate 18.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hrvatska Postanska Banka vs. Podravka Prehrambena Industrij
Performance |
| Timeline |
| Hrvatska Postanska Banka |
| Podravka Prehrambena |
Hrvatska Postanska and Podravka Prehrambena Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hrvatska Postanska and Podravka Prehrambena
The main advantage of trading using opposite Hrvatska Postanska and Podravka Prehrambena positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hrvatska Postanska 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.| Hrvatska Postanska vs. Zagrebacka Banka dd | Hrvatska Postanska vs. AD Plastik dd | Hrvatska Postanska vs. Dalekovod dd | Hrvatska Postanska vs. Podravka Prehrambena Industrija |
| Podravka Prehrambena vs. AD Plastik dd | Podravka Prehrambena vs. Hrvatska Postanska Banka | Podravka Prehrambena vs. Dalekovod dd | Podravka Prehrambena vs. Adris Grupa 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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