Correlation Between Nasdaq and INA Industrija

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

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

Diversification Opportunities for Nasdaq and INA Industrija

0.15

Correlation Coefficient

Nasdaq  INA Industrija

Average diversification

The 3 months correlation between Nasdaq and INA is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Nasdaq Inc 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 Nasdaq 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 Nasdaq Inc 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 Nasdaq i.e., Nasdaq and INA Industrija go up and down completely randomly.

Pair Corralation between Nasdaq and INA Industrija

Given the investment horizon of 90 days Nasdaq Inc is expected to generate 0.76 times more return on investment than INA Industrija. However, Nasdaq Inc is 1.32 times less risky than INA Industrija. It trades about -0.01 of its potential returns per unit of risk. INA Industrija Nafte dd is currently generating about -0.05 per unit of risk. If you would invest  7,886  in Nasdaq Inc on December 26, 2024 and sell it today you would lose (119.00) from holding Nasdaq Inc or give up 1.51% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	50.0%
Values	Daily Returns

Nasdaq Inc  vs.  INA Industrija Nafte dd

Nasdaq Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Nasdaq Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Nasdaq is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

INA Industrija Nafte

Risk-Adjusted Performance

Very 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.

Pair Trading with Nasdaq and INA Industrija

The main advantage of trading using opposite Nasdaq and INA Industrija positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nasdaq 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 Nasdaq Inc 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 Stocks Directory module to find actively traded stocks across global markets.