Correlation Between INA Industrija and AD Plastik

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

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

Diversification Opportunities for INA Industrija and AD Plastik

0.74

Correlation Coefficient

INA Industrija  AD Plastik

Poor diversification

The 3 months correlation between INA and ADPL is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding INA Industrija Nafte 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 INA Industrija 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 INA Industrija Nafte 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 INA Industrija i.e., INA Industrija and AD Plastik go up and down completely randomly.

Pair Corralation between INA Industrija and AD Plastik

Assuming the 90 days trading horizon INA Industrija Nafte dd is expected to generate 0.9 times more return on investment than AD Plastik. However, INA Industrija Nafte dd is 1.11 times less risky than AD Plastik. It trades about 0.03 of its potential returns per unit of risk. AD Plastik dd is currently generating about -0.14 per unit of risk. If you would invest  46,000  in INA Industrija Nafte dd on September 12, 2024 and sell it today you would earn a total of  600.00  from holding INA Industrija Nafte dd or generate 1.3% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	44.64%
Values	Daily Returns

INA Industrija Nafte dd  vs.  AD Plastik dd

INA Industrija Nafte

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days INA Industrija Nafte dd has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, INA Industrija is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

AD Plastik dd

Risk-Adjusted Performance

0 of 100

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 unsteady performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with INA Industrija and AD Plastik

The main advantage of trading using opposite INA Industrija and AD Plastik positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INA Industrija 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 INA Industrija Nafte 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.