Correlation Between Ingra Dd and Hrvatski Telekom

Can any of the company-specific risk be diversified away by investing in both Ingra Dd and Hrvatski Telekom 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 Ingra Dd and Hrvatski Telekom into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Ingra Dd and Hrvatski Telekom

-0.53

Correlation Coefficient

Ingra Dd  Hrvatski Telekom

Excellent diversification

The 3 months correlation between Ingra and Hrvatski is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Ingra dd and Hrvatski Telekom dd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hrvatski Telekom and Ingra Dd 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 Ingra dd are associated (or correlated) with Hrvatski Telekom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hrvatski Telekom has no effect on the direction of Ingra Dd i.e., Ingra Dd and Hrvatski Telekom go up and down completely randomly.

Pair Corralation between Ingra Dd and Hrvatski Telekom

Assuming the 90 days trading horizon Ingra dd is expected to under-perform the Hrvatski Telekom. In addition to that, Ingra Dd is 3.21 times more volatile than Hrvatski Telekom dd. It trades about -0.03 of its total potential returns per unit of risk. Hrvatski Telekom dd is currently generating about 0.08 per unit of volatility. If you would invest  4,010  in Hrvatski Telekom dd on December 1, 2024 and sell it today you would earn a total of  190.00  from holding Hrvatski Telekom dd or generate 4.74% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	78.33%
Values	Daily Returns

Ingra dd  vs.  Hrvatski Telekom dd

Ingra dd

Risk-Adjusted Performance

Very Weak

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

Hrvatski Telekom

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Hrvatski Telekom dd are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, Hrvatski Telekom is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Ingra Dd and Hrvatski Telekom

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

The idea behind Ingra dd and Hrvatski Telekom 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.

Check out your portfolio center.

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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.