Correlation Between Institut IGH and KRA Dd
Can any of the company-specific risk be diversified away by investing in both Institut IGH and KRA Dd 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 KRA Dd 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 KRA dd, you can compare the effects of market volatilities on Institut IGH and KRA Dd 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 KRA Dd. Check out your portfolio center. Please also check ongoing floating volatility patterns of Institut IGH and KRA Dd.
Diversification Opportunities for Institut IGH and KRA Dd
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Institut and KRA is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Institut IGH dd and KRA dd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KRA 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 KRA Dd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KRA dd has no effect on the direction of Institut IGH i.e., Institut IGH and KRA Dd go up and down completely randomly.
Pair Corralation between Institut IGH and KRA Dd
Assuming the 90 days trading horizon Institut IGH dd is expected to generate 2.37 times more return on investment than KRA Dd. However, Institut IGH is 2.37 times more volatile than KRA dd. It trades about 0.03 of its potential returns per unit of risk. KRA dd is currently generating about -0.29 per unit of risk. If you would invest 1,500 in Institut IGH dd on October 20, 2024 and sell it today you would earn a total of 0.00 from holding Institut IGH dd or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 66.67% |
| Values | Daily Returns |
Institut IGH dd vs. KRA dd
Performance |
| Timeline |
| Institut IGH dd |
| KRA dd |
Institut IGH and KRA Dd Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Institut IGH and KRA Dd
The main advantage of trading using opposite Institut IGH and KRA Dd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Institut IGH position performs unexpectedly, KRA Dd 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 KRA Dd will offset losses from the drop in KRA Dd's long position.| Institut IGH vs. Dalekovod dd | Institut IGH vs. Jadroplov dd | Institut IGH vs. Zagrebacka Banka dd | Institut IGH vs. Podravka Prehrambena Industrija |
| KRA Dd vs. AD Plastik dd | KRA Dd vs. Hrvatska Postanska Banka | KRA Dd vs. Dalekovod dd | KRA Dd 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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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