Correlation Between Institut IGH and Dalekovod
Can any of the company-specific risk be diversified away by investing in both Institut IGH and Dalekovod 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 Dalekovod 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 Dalekovod dd, you can compare the effects of market volatilities on Institut IGH and Dalekovod 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 Dalekovod. Check out your portfolio center. Please also check ongoing floating volatility patterns of Institut IGH and Dalekovod.
Diversification Opportunities for Institut IGH and Dalekovod
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Institut and Dalekovod is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Institut IGH dd and Dalekovod dd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dalekovod 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 Dalekovod. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dalekovod dd has no effect on the direction of Institut IGH i.e., Institut IGH and Dalekovod go up and down completely randomly.
Pair Corralation between Institut IGH and Dalekovod
Assuming the 90 days trading horizon Institut IGH dd is expected to generate 2.21 times more return on investment than Dalekovod. However, Institut IGH is 2.21 times more volatile than Dalekovod dd. It trades about 0.05 of its potential returns per unit of risk. Dalekovod dd is currently generating about 0.05 per unit of risk. If you would invest 1,161 in Institut IGH dd on September 13, 2024 and sell it today you would earn a total of 539.00 from holding Institut IGH dd or generate 46.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 73.83% |
| Values | Daily Returns |
Institut IGH dd vs. Dalekovod dd
Performance |
| Timeline |
| Institut IGH dd |
| Dalekovod dd |
Institut IGH and Dalekovod Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Institut IGH and Dalekovod
The main advantage of trading using opposite Institut IGH and Dalekovod positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Institut IGH position performs unexpectedly, Dalekovod 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 Dalekovod will offset losses from the drop in Dalekovod'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 |
| Dalekovod vs. AD Plastik dd | Dalekovod vs. Hrvatska Postanska Banka | Dalekovod vs. Podravka Prehrambena Industrija | Dalekovod 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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