Correlation Between AD Plastik and Adris Grupa

Can any of the company-specific risk be diversified away by investing in both AD Plastik and Adris Grupa 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 AD Plastik and Adris Grupa into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between AD Plastik dd and Adris Grupa dd, you can compare the effects of market volatilities on AD Plastik and Adris Grupa 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 AD Plastik with a short position of Adris Grupa. Check out your portfolio center. Please also check ongoing floating volatility patterns of AD Plastik and Adris Grupa.

Diversification Opportunities for AD Plastik and Adris Grupa

0.55

Correlation Coefficient

AD Plastik  Adris Grupa

Very weak diversification

The 3 months correlation between ADPL and Adris is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding AD Plastik dd and Adris Grupa dd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adris Grupa dd and AD Plastik 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 AD Plastik dd are associated (or correlated) with Adris Grupa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adris Grupa dd has no effect on the direction of AD Plastik i.e., AD Plastik and Adris Grupa go up and down completely randomly.

Pair Corralation between AD Plastik and Adris Grupa

Assuming the 90 days trading horizon AD Plastik is expected to generate 1.24 times less return on investment than Adris Grupa. In addition to that, AD Plastik is 1.92 times more volatile than Adris Grupa dd. It trades about 0.06 of its total potential returns per unit of risk. Adris Grupa dd is currently generating about 0.15 per unit of volatility. If you would invest  8,000  in Adris Grupa dd on December 30, 2024 and sell it today you would earn a total of  900.00  from holding Adris Grupa dd or generate 11.25% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	72.58%
Values	Daily Returns

AD Plastik dd  vs.  Adris Grupa dd

AD Plastik dd

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in AD Plastik dd are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, AD Plastik unveiled solid returns over the last few months and may actually be approaching a breakup point.

Adris Grupa dd

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Adris Grupa dd are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Adris Grupa unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with AD Plastik and Adris Grupa

The main advantage of trading using opposite AD Plastik and Adris Grupa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AD Plastik position performs unexpectedly, Adris Grupa 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 Adris Grupa will offset losses from the drop in Adris Grupa's long position.

The idea behind AD Plastik dd and Adris Grupa dd pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.