Correlation Between INA Industrija and Hrvatska Postanska

Can any of the company-specific risk be diversified away by investing in both INA Industrija and Hrvatska Postanska 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 Hrvatska Postanska 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 Hrvatska Postanska Banka, you can compare the effects of market volatilities on INA Industrija and Hrvatska Postanska 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 Hrvatska Postanska. Check out your portfolio center. Please also check ongoing floating volatility patterns of INA Industrija and Hrvatska Postanska.

Diversification Opportunities for INA Industrija and Hrvatska Postanska

-0.13

Correlation Coefficient

INA Industrija  Hrvatska Postanska

Good diversification

The 3 months correlation between INA and Hrvatska is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding INA Industrija Nafte dd and Hrvatska Postanska Banka in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hrvatska Postanska Banka 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 Hrvatska Postanska. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hrvatska Postanska Banka has no effect on the direction of INA Industrija i.e., INA Industrija and Hrvatska Postanska go up and down completely randomly.

Pair Corralation between INA Industrija and Hrvatska Postanska

Assuming the 90 days trading horizon INA Industrija Nafte dd is expected to generate 1.27 times more return on investment than Hrvatska Postanska. However, INA Industrija is 1.27 times more volatile than Hrvatska Postanska Banka. It trades about 0.07 of its potential returns per unit of risk. Hrvatska Postanska Banka is currently generating about -0.09 per unit of risk. 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

INA Industrija Nafte dd  vs.  Hrvatska Postanska Banka

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.

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.

Pair Trading with INA Industrija and Hrvatska Postanska

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

The idea behind INA Industrija Nafte dd and Hrvatska Postanska Banka 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.