Correlation Between INA Industrija and Adris Grupa

Can any of the company-specific risk be diversified away by investing in both INA Industrija 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 INA Industrija and Adris Grupa 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 Adris Grupa dd, you can compare the effects of market volatilities on INA Industrija 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 INA Industrija with a short position of Adris Grupa. Check out your portfolio center. Please also check ongoing floating volatility patterns of INA Industrija and Adris Grupa.

Diversification Opportunities for INA Industrija and Adris Grupa

0.5

Correlation Coefficient

INA Industrija  Adris Grupa

Very weak diversification

The 3 months correlation between INA and Adris is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding INA Industrija Nafte 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 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 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 INA Industrija i.e., INA Industrija and Adris Grupa go up and down completely randomly.

Pair Corralation between INA Industrija and Adris Grupa

Assuming the 90 days trading horizon INA Industrija Nafte dd is expected to generate 1.59 times more return on investment than Adris Grupa. However, INA Industrija is 1.59 times more volatile than Adris Grupa dd. It trades about 0.03 of its potential returns per unit of risk. Adris Grupa dd is currently generating about 0.01 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	Weak
Accuracy	58.14%
Values	Daily Returns

INA Industrija Nafte dd  vs.  Adris Grupa 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.

Adris Grupa dd

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with INA Industrija and Adris Grupa

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

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