Correlation Between Institut IGH and Hrvatska Postanska
Can any of the company-specific risk be diversified away by investing in both Institut IGH and Hrvatska Postanska 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 Hrvatska Postanska 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 Hrvatska Postanska Banka, you can compare the effects of market volatilities on Institut IGH and Hrvatska Postanska 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 Hrvatska Postanska. Check out your portfolio center. Please also check ongoing floating volatility patterns of Institut IGH and Hrvatska Postanska.
Diversification Opportunities for Institut IGH and Hrvatska Postanska
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Institut and Hrvatska is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Institut IGH dd and Hrvatska Postanska Banka in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hrvatska Postanska Banka 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 Hrvatska Postanska. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hrvatska Postanska Banka has no effect on the direction of Institut IGH i.e., Institut IGH and Hrvatska Postanska go up and down completely randomly.
Pair Corralation between Institut IGH and Hrvatska Postanska
Assuming the 90 days trading horizon Institut IGH dd is expected to under-perform the Hrvatska Postanska. In addition to that, Institut IGH is 3.21 times more volatile than Hrvatska Postanska Banka. It trades about -0.05 of its total potential returns per unit of risk. Hrvatska Postanska Banka is currently generating about 0.18 per unit of volatility. If you would invest 23,000 in Hrvatska Postanska Banka on November 2, 2024 and sell it today you would earn a total of 9,000 from holding Hrvatska Postanska Banka or generate 39.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 57.14% |
| Values | Daily Returns |
Institut IGH dd vs. Hrvatska Postanska Banka
Performance |
| Timeline |
| Institut IGH dd |
| Hrvatska Postanska Banka |
Institut IGH and Hrvatska Postanska Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Institut IGH and Hrvatska Postanska
The main advantage of trading using opposite Institut IGH and Hrvatska Postanska positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Institut IGH position performs unexpectedly, Hrvatska Postanska 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 Hrvatska Postanska will offset losses from the drop in Hrvatska Postanska's long position.| Institut IGH vs. Dalekovod dd | Institut IGH vs. INA Industrija Nafte dd | Institut IGH vs. Jadroplov dd | Institut IGH vs. Zagrebacka Banka dd |
| Hrvatska Postanska vs. Dalekovod dd | Hrvatska Postanska vs. Institut IGH dd | Hrvatska Postanska vs. INA Industrija Nafte dd | Hrvatska Postanska vs. Jadroplov 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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