Correlation Between Hrvatska Postanska and INA Industrija

Can any of the company-specific risk be diversified away by investing in both Hrvatska Postanska 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 Hrvatska Postanska and INA Industrija into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Hrvatska Postanska Banka and INA Industrija Nafte dd, you can compare the effects of market volatilities on Hrvatska Postanska 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 Hrvatska Postanska with a short position of INA Industrija. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hrvatska Postanska and INA Industrija.

Diversification Opportunities for Hrvatska Postanska and INA Industrija

-0.12

Correlation Coefficient

Hrvatska Postanska  INA Industrija

Good diversification

The 3 months correlation between Hrvatska and INA is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Hrvatska Postanska Banka 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 Hrvatska Postanska 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 Hrvatska Postanska Banka 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 Hrvatska Postanska i.e., Hrvatska Postanska and INA Industrija go up and down completely randomly.

Pair Corralation between Hrvatska Postanska and INA Industrija

Assuming the 90 days trading horizon Hrvatska Postanska Banka is expected to under-perform the INA Industrija. But the stock apears to be less risky and, when comparing its historical volatility, Hrvatska Postanska Banka is 1.27 times less risky than INA Industrija. The stock trades about -0.09 of its potential returns per unit of risk. The INA Industrija Nafte dd is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  45,400  in INA Industrija Nafte dd on December 30, 2024 and sell it today you would earn a total of  1,600  from holding INA Industrija Nafte dd or generate 3.52% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	53.45%
Values	Daily Returns

Hrvatska Postanska Banka  vs.  INA Industrija Nafte dd

Hrvatska Postanska Banka

Risk-Adjusted Performance

Very Weak

Over the last 90 days Hrvatska Postanska Banka has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

INA Industrija Nafte

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in INA Industrija Nafte dd are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, INA Industrija may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Hrvatska Postanska and INA Industrija

The main advantage of trading using opposite Hrvatska Postanska and INA Industrija positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hrvatska Postanska 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.

The idea behind Hrvatska Postanska Banka and INA Industrija Nafte 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.

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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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.