Correlation Between Podravka Prehrambena and Arena Hospitality
Can any of the company-specific risk be diversified away by investing in both Podravka Prehrambena and Arena Hospitality 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 Arena Hospitality 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 Arena Hospitality Group, you can compare the effects of market volatilities on Podravka Prehrambena and Arena Hospitality 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 Arena Hospitality. Check out your portfolio center. Please also check ongoing floating volatility patterns of Podravka Prehrambena and Arena Hospitality.
Diversification Opportunities for Podravka Prehrambena and Arena Hospitality
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Podravka and Arena is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Podravka Prehrambena Industrij and Arena Hospitality Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arena Hospitality 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 Arena Hospitality. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arena Hospitality has no effect on the direction of Podravka Prehrambena i.e., Podravka Prehrambena and Arena Hospitality go up and down completely randomly.
Pair Corralation between Podravka Prehrambena and Arena Hospitality
Assuming the 90 days trading horizon Podravka Prehrambena Industrija is expected to generate 1.79 times more return on investment than Arena Hospitality. However, Podravka Prehrambena is 1.79 times more volatile than Arena Hospitality Group. It trades about -0.03 of its potential returns per unit of risk. Arena Hospitality Group is currently generating about -0.2 per unit of risk. If you would invest 14,450 in Podravka Prehrambena Industrija on October 20, 2024 and sell it today you would lose (150.00) from holding Podravka Prehrambena Industrija or give up 1.04% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 70.59% |
| Values | Daily Returns |
Podravka Prehrambena Industrij vs. Arena Hospitality Group
Performance |
| Timeline |
| Podravka Prehrambena |
| Arena Hospitality |
Podravka Prehrambena and Arena Hospitality Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Podravka Prehrambena and Arena Hospitality
The main advantage of trading using opposite Podravka Prehrambena and Arena Hospitality positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Podravka Prehrambena position performs unexpectedly, Arena Hospitality 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 Arena Hospitality will offset losses from the drop in Arena Hospitality's long position.| Podravka Prehrambena vs. Dalekovod dd | Podravka Prehrambena vs. Institut IGH dd | Podravka Prehrambena vs. Jadroplov dd | Podravka Prehrambena vs. KRA dd |
| Arena Hospitality vs. AD Plastik dd | Arena Hospitality vs. Hrvatska Postanska Banka | Arena Hospitality vs. Dalekovod dd | Arena Hospitality 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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