Correlation Between INA Industrija and Zagrebacka Banka
Can any of the company-specific risk be diversified away by investing in both INA Industrija and Zagrebacka Banka 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 INA Industrija and Zagrebacka Banka into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between INA Industrija Nafte dd and Zagrebacka Banka dd, you can compare the effects of market volatilities on INA Industrija and Zagrebacka Banka 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 INA Industrija with a short position of Zagrebacka Banka. Check out your portfolio center. Please also check ongoing floating volatility patterns of INA Industrija and Zagrebacka Banka.
Diversification Opportunities for INA Industrija and Zagrebacka Banka
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between INA and Zagrebacka is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding INA Industrija Nafte dd and Zagrebacka Banka dd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zagrebacka Banka and INA Industrija 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 INA Industrija Nafte dd are associated (or correlated) with Zagrebacka Banka. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zagrebacka Banka has no effect on the direction of INA Industrija i.e., INA Industrija and Zagrebacka Banka go up and down completely randomly.
Pair Corralation between INA Industrija and Zagrebacka Banka
Assuming the 90 days trading horizon INA Industrija is expected to generate 3.88 times less return on investment than Zagrebacka Banka. In addition to that, INA Industrija is 1.65 times more volatile than Zagrebacka Banka dd. It trades about 0.03 of its total potential returns per unit of risk. Zagrebacka Banka dd is currently generating about 0.17 per unit of volatility. If you would invest 1,335 in Zagrebacka Banka dd on September 12, 2024 and sell it today you would earn a total of 1,175 from holding Zagrebacka Banka dd or generate 88.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 49.85% |
| Values | Daily Returns |
INA Industrija Nafte dd vs. Zagrebacka Banka dd
Performance |
| Timeline |
| INA Industrija Nafte |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Weak
| Zagrebacka Banka |
INA Industrija and Zagrebacka Banka Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with INA Industrija and Zagrebacka Banka
The main advantage of trading using opposite INA Industrija and Zagrebacka Banka positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INA Industrija position performs unexpectedly, Zagrebacka Banka 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 Zagrebacka Banka will offset losses from the drop in Zagrebacka Banka's long position.| INA Industrija vs. AD Plastik dd | INA Industrija vs. Hrvatska Postanska Banka | INA Industrija vs. Dalekovod dd | INA Industrija vs. Podravka Prehrambena Industrija |
| Zagrebacka Banka vs. Dalekovod dd | Zagrebacka Banka vs. Institut IGH dd | Zagrebacka Banka 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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