Correlation Between Institut IGH and AD Plastik
Can any of the company-specific risk be diversified away by investing in both Institut IGH and AD Plastik 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 Institut IGH and AD Plastik into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Institut IGH dd and AD Plastik dd, you can compare the effects of market volatilities on Institut IGH and AD Plastik 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 Institut IGH with a short position of AD Plastik. Check out your portfolio center. Please also check ongoing floating volatility patterns of Institut IGH and AD Plastik.
Diversification Opportunities for Institut IGH and AD Plastik
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Institut and ADPL is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Institut IGH dd and AD Plastik dd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AD Plastik dd and Institut IGH 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 Institut IGH dd are associated (or correlated) with AD Plastik. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AD Plastik dd has no effect on the direction of Institut IGH i.e., Institut IGH and AD Plastik go up and down completely randomly.
Pair Corralation between Institut IGH and AD Plastik
Assuming the 90 days trading horizon Institut IGH dd is expected to under-perform the AD Plastik. In addition to that, Institut IGH is 2.22 times more volatile than AD Plastik dd. It trades about -0.29 of its total potential returns per unit of risk. AD Plastik dd is currently generating about -0.3 per unit of volatility. If you would invest 1,130 in AD Plastik dd on September 12, 2024 and sell it today you would lose (132.00) from holding AD Plastik dd or give up 11.68% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 57.89% |
| Values | Daily Returns |
Institut IGH dd vs. AD Plastik dd
Performance |
| Timeline |
| Institut IGH dd |
| AD Plastik dd |
Institut IGH and AD Plastik Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Institut IGH and AD Plastik
The main advantage of trading using opposite Institut IGH and AD Plastik positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Institut IGH position performs unexpectedly, AD Plastik 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 AD Plastik will offset losses from the drop in AD Plastik's long position.| Institut IGH vs. AD Plastik dd | Institut IGH vs. Hrvatska Postanska Banka | Institut IGH vs. Dalekovod dd | Institut IGH vs. Podravka Prehrambena Industrija |
| AD Plastik vs. Hrvatska Postanska Banka | AD Plastik vs. Dalekovod dd | AD Plastik vs. Podravka Prehrambena Industrija | AD Plastik 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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