Correlation Between Podravka Prehrambena and KRA Dd
Can any of the company-specific risk be diversified away by investing in both Podravka Prehrambena and KRA Dd 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 KRA Dd 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 KRA dd, you can compare the effects of market volatilities on Podravka Prehrambena and KRA Dd 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 KRA Dd. Check out your portfolio center. Please also check ongoing floating volatility patterns of Podravka Prehrambena and KRA Dd.
Diversification Opportunities for Podravka Prehrambena and KRA Dd
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Podravka and KRA is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Podravka Prehrambena Industrij and KRA dd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KRA 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 KRA Dd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KRA dd has no effect on the direction of Podravka Prehrambena i.e., Podravka Prehrambena and KRA Dd go up and down completely randomly.
Pair Corralation between Podravka Prehrambena and KRA Dd
Assuming the 90 days trading horizon Podravka Prehrambena Industrija is expected to under-perform the KRA Dd. But the stock apears to be less risky and, when comparing its historical volatility, Podravka Prehrambena Industrija is 2.5 times less risky than KRA Dd. The stock trades about -0.06 of its potential returns per unit of risk. The KRA dd is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 11,000 in KRA dd on November 2, 2024 and sell it today you would earn a total of 300.00 from holding KRA dd or generate 2.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 40.0% |
| Values | Daily Returns |
Podravka Prehrambena Industrij vs. KRA dd
Performance |
| Timeline |
| Podravka Prehrambena |
| KRA dd |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Podravka Prehrambena and KRA Dd Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Podravka Prehrambena and KRA Dd
The main advantage of trading using opposite Podravka Prehrambena and KRA Dd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Podravka Prehrambena position performs unexpectedly, KRA Dd 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 KRA Dd will offset losses from the drop in KRA Dd'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 |
| KRA Dd vs. Dalekovod dd | KRA Dd vs. Institut IGH dd | KRA Dd vs. Jadroplov dd | KRA Dd 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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