Correlation Between Zagrebacka Banka and Podravka Prehrambena
Can any of the company-specific risk be diversified away by investing in both Zagrebacka Banka and Podravka Prehrambena 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 Zagrebacka Banka and Podravka Prehrambena into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Zagrebacka Banka dd and Podravka Prehrambena Industrija, you can compare the effects of market volatilities on Zagrebacka Banka and Podravka Prehrambena 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 Zagrebacka Banka with a short position of Podravka Prehrambena. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zagrebacka Banka and Podravka Prehrambena.
Diversification Opportunities for Zagrebacka Banka and Podravka Prehrambena
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Zagrebacka and Podravka is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Zagrebacka Banka dd and Podravka Prehrambena Industrij in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Podravka Prehrambena and Zagrebacka Banka 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 Zagrebacka Banka dd are associated (or correlated) with Podravka Prehrambena. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Podravka Prehrambena has no effect on the direction of Zagrebacka Banka i.e., Zagrebacka Banka and Podravka Prehrambena go up and down completely randomly.
Pair Corralation between Zagrebacka Banka and Podravka Prehrambena
Assuming the 90 days trading horizon Zagrebacka Banka dd is expected to generate 0.93 times more return on investment than Podravka Prehrambena. However, Zagrebacka Banka dd is 1.07 times less risky than Podravka Prehrambena. It trades about 0.28 of its potential returns per unit of risk. Podravka Prehrambena Industrija is currently generating about -0.03 per unit of risk. If you would invest 2,790 in Zagrebacka Banka dd on October 20, 2024 and sell it today you would earn a total of 210.00 from holding Zagrebacka Banka dd or generate 7.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 94.12% |
| Values | Daily Returns |
Zagrebacka Banka dd vs. Podravka Prehrambena Industrij
Performance |
| Timeline |
| Zagrebacka Banka |
| Podravka Prehrambena |
Zagrebacka Banka and Podravka Prehrambena Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zagrebacka Banka and Podravka Prehrambena
The main advantage of trading using opposite Zagrebacka Banka and Podravka Prehrambena positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zagrebacka Banka position performs unexpectedly, Podravka Prehrambena 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 Podravka Prehrambena will offset losses from the drop in Podravka Prehrambena's long position.| Zagrebacka Banka vs. Hrvatska Postanska Banka | Zagrebacka Banka vs. AD Plastik dd | Zagrebacka Banka vs. Dalekovod dd | Zagrebacka Banka vs. Podravka Prehrambena Industrija |
| Podravka Prehrambena vs. Dalekovod dd | Podravka Prehrambena vs. Institut IGH dd | Podravka Prehrambena vs. Jadroplov dd | Podravka Prehrambena vs. KRA 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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