Correlation Between Institut IGH and AD Plastik

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

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

Diversification Opportunities for Institut IGH and AD Plastik

-0.06

Correlation Coefficient

Institut IGH  AD Plastik

Good diversification

The 3 months correlation between Institut and ADPL is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Institut IGH dd and AD Plastik dd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AD Plastik dd and Institut IGH 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 Institut IGH dd are associated (or correlated) with AD Plastik. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AD Plastik dd has no effect on the direction of Institut IGH i.e., Institut IGH and AD Plastik go up and down completely randomly.

Pair Corralation between Institut IGH and AD Plastik

Assuming the 90 days trading horizon Institut IGH dd is expected to generate 2.34 times more return on investment than AD Plastik. However, Institut IGH is 2.34 times more volatile than AD Plastik dd. It trades about 0.02 of its potential returns per unit of risk. AD Plastik dd is currently generating about 0.0 per unit of risk. If you would invest  1,850  in Institut IGH dd on December 1, 2024 and sell it today you would lose (70.00) from holding Institut IGH dd or give up 3.78% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	63.79%
Values	Daily Returns

Institut IGH dd  vs.  AD Plastik dd

Institut IGH dd

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Institut IGH dd are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Institut IGH may actually be approaching a critical reversion point that can send shares even higher in April 2025.

AD Plastik dd

Risk-Adjusted Performance

Very Weak

Over the last 90 days AD Plastik dd has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, AD Plastik is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Institut IGH and AD Plastik

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

The idea behind Institut IGH dd and AD Plastik 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 Commodity Directory module to find actively traded commodities issued by global exchanges.