Correlation Between Podravka Prehrambena and AD Plastik
Can any of the company-specific risk be diversified away by investing in both Podravka Prehrambena and AD Plastik 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 Podravka Prehrambena and AD Plastik into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Podravka Prehrambena Industrija and AD Plastik dd, you can compare the effects of market volatilities on Podravka Prehrambena and AD Plastik 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 Podravka Prehrambena with a short position of AD Plastik. Check out your portfolio center. Please also check ongoing floating volatility patterns of Podravka Prehrambena and AD Plastik.
Diversification Opportunities for Podravka Prehrambena and AD Plastik
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Podravka and ADPL is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Podravka Prehrambena Industrij and AD Plastik dd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AD Plastik dd and Podravka Prehrambena 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 Podravka Prehrambena Industrija are associated (or correlated) with AD Plastik. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AD Plastik dd has no effect on the direction of Podravka Prehrambena i.e., Podravka Prehrambena and AD Plastik go up and down completely randomly.
Pair Corralation between Podravka Prehrambena and AD Plastik
Assuming the 90 days trading horizon Podravka Prehrambena Industrija is expected to under-perform the AD Plastik. But the stock apears to be less risky and, when comparing its historical volatility, Podravka Prehrambena Industrija is 3.15 times less risky than AD Plastik. The stock trades about -0.06 of its potential returns per unit of risk. The AD Plastik dd is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 944.00 in AD Plastik dd on November 2, 2024 and sell it today you would earn a total of 151.00 from holding AD Plastik dd or generate 16.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Podravka Prehrambena Industrij vs. AD Plastik dd
Performance |
| Timeline |
| Podravka Prehrambena |
| AD Plastik dd |
Podravka Prehrambena and AD Plastik Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Podravka Prehrambena and AD Plastik
The main advantage of trading using opposite Podravka Prehrambena and AD Plastik positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Podravka Prehrambena position performs unexpectedly, AD Plastik 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 AD Plastik will offset losses from the drop in AD Plastik's long position.| Podravka Prehrambena vs. Dalekovod dd | Podravka Prehrambena vs. Institut IGH dd | Podravka Prehrambena vs. Jadroplov dd | Podravka Prehrambena vs. Zagrebacka Banka dd |
| AD Plastik vs. Dalekovod dd | AD Plastik vs. Institut IGH dd | AD Plastik vs. INA Industrija Nafte dd | AD Plastik 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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