Correlation Between Podravka Prehrambena and INA Industrija
Can any of the company-specific risk be diversified away by investing in both Podravka Prehrambena and INA Industrija 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 INA Industrija 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 INA Industrija Nafte dd, you can compare the effects of market volatilities on Podravka Prehrambena and INA Industrija 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 INA Industrija. Check out your portfolio center. Please also check ongoing floating volatility patterns of Podravka Prehrambena and INA Industrija.
Diversification Opportunities for Podravka Prehrambena and INA Industrija
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Podravka and INA is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Podravka Prehrambena Industrij and INA Industrija Nafte dd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INA Industrija Nafte 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 INA Industrija. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INA Industrija Nafte has no effect on the direction of Podravka Prehrambena i.e., Podravka Prehrambena and INA Industrija go up and down completely randomly.
Pair Corralation between Podravka Prehrambena and INA Industrija
Assuming the 90 days trading horizon Podravka Prehrambena Industrija is expected to generate 0.73 times more return on investment than INA Industrija. However, Podravka Prehrambena Industrija is 1.37 times less risky than INA Industrija. It trades about 0.09 of its potential returns per unit of risk. INA Industrija Nafte dd is currently generating about 0.01 per unit of risk. If you would invest 8,436 in Podravka Prehrambena Industrija on September 13, 2024 and sell it today you would earn a total of 6,114 from holding Podravka Prehrambena Industrija or generate 72.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 49.79% |
| Values | Daily Returns |
Podravka Prehrambena Industrij vs. INA Industrija Nafte dd
Performance |
| Timeline |
| Podravka Prehrambena |
| INA Industrija Nafte |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Podravka Prehrambena and INA Industrija Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Podravka Prehrambena and INA Industrija
The main advantage of trading using opposite Podravka Prehrambena and INA Industrija positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Podravka Prehrambena position performs unexpectedly, INA Industrija 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 INA Industrija will offset losses from the drop in INA Industrija'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 |
| INA Industrija vs. Dalekovod dd | INA Industrija vs. Institut IGH dd | INA Industrija vs. Jadroplov dd | INA Industrija 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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