Correlation Between Jadroplov and INA Industrija

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

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

Diversification Opportunities for Jadroplov and INA Industrija

-0.6

Correlation Coefficient

Jadroplov  INA Industrija

Excellent diversification

The 3 months correlation between Jadroplov and INA is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Jadroplov dd and INA Industrija Nafte dd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INA Industrija Nafte and Jadroplov 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 Jadroplov dd are associated (or correlated) with INA Industrija. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INA Industrija Nafte has no effect on the direction of Jadroplov i.e., Jadroplov and INA Industrija go up and down completely randomly.

Pair Corralation between Jadroplov and INA Industrija

Assuming the 90 days trading horizon Jadroplov dd is expected to under-perform the INA Industrija. In addition to that, Jadroplov is 1.16 times more volatile than INA Industrija Nafte dd. It trades about -0.09 of its total potential returns per unit of risk. INA Industrija Nafte dd is currently generating about 0.05 per unit of volatility. If you would invest  46,600  in INA Industrija Nafte dd on December 4, 2024 and sell it today you would earn a total of  1,000.00  from holding INA Industrija Nafte dd or generate 2.15% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	78.79%
Values	Daily Returns

Jadroplov dd  vs.  INA Industrija Nafte dd

Jadroplov dd

Risk-Adjusted Performance

Very Weak

Over the last 90 days Jadroplov dd has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

INA Industrija Nafte

Risk-Adjusted Performance

Insignificant

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 uncertain technical and fundamental indicators, INA Industrija may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Jadroplov and INA Industrija

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

The idea behind Jadroplov dd and INA Industrija Nafte 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 Transaction History module to view history of all your transactions and understand their impact on performance.