Correlation Between Institut IGH and Podravka Prehrambena
Can any of the company-specific risk be diversified away by investing in both Institut IGH 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 Institut IGH and Podravka Prehrambena 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 Podravka Prehrambena Industrija, you can compare the effects of market volatilities on Institut IGH 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 Institut IGH with a short position of Podravka Prehrambena. Check out your portfolio center. Please also check ongoing floating volatility patterns of Institut IGH and Podravka Prehrambena.
Diversification Opportunities for Institut IGH and Podravka Prehrambena
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Institut and Podravka is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Institut IGH dd and Podravka Prehrambena Industrij in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Podravka Prehrambena 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 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 Institut IGH i.e., Institut IGH and Podravka Prehrambena go up and down completely randomly.
Pair Corralation between Institut IGH and Podravka Prehrambena
Assuming the 90 days trading horizon Institut IGH dd is expected to under-perform the Podravka Prehrambena. In addition to that, Institut IGH is 4.49 times more volatile than Podravka Prehrambena Industrija. It trades about -0.05 of its total potential returns per unit of risk. Podravka Prehrambena Industrija is currently generating about -0.06 per unit of volatility. If you would invest 15,850 in Podravka Prehrambena Industrija on November 2, 2024 and sell it today you would lose (1,550) from holding Podravka Prehrambena Industrija or give up 9.78% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 52.53% |
| Values | Daily Returns |
Institut IGH dd vs. Podravka Prehrambena Industrij
Performance |
| Timeline |
| Institut IGH dd |
| Podravka Prehrambena |
Institut IGH and Podravka Prehrambena Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Institut IGH and Podravka Prehrambena
The main advantage of trading using opposite Institut IGH and Podravka Prehrambena positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Institut IGH 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.| Institut IGH vs. Dalekovod dd | Institut IGH vs. INA Industrija Nafte dd | Institut IGH vs. Jadroplov dd | Institut IGH vs. Zagrebacka Banka dd |
| Podravka Prehrambena vs. Dalekovod dd | Podravka Prehrambena vs. Institut IGH dd | Podravka Prehrambena vs. Jadroplov dd | Podravka Prehrambena vs. Zagrebacka Banka 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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