Correlation Between AD Plastik and Adris Grupa

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Can any of the company-specific risk be diversified away by investing in both AD Plastik 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 AD Plastik and Adris Grupa into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AD Plastik dd and Adris Grupa dd, you can compare the effects of market volatilities on AD Plastik 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 AD Plastik with a short position of Adris Grupa. Check out your portfolio center. Please also check ongoing floating volatility patterns of AD Plastik and Adris Grupa.

Diversification Opportunities for AD Plastik and Adris Grupa

0.63
  Correlation Coefficient

Poor diversification

The 3 months correlation between ADPL and Adris is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding AD Plastik 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 AD Plastik 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 AD Plastik 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 AD Plastik i.e., AD Plastik and Adris Grupa go up and down completely randomly.

Pair Corralation between AD Plastik and Adris Grupa

Assuming the 90 days trading horizon AD Plastik dd is expected to under-perform the Adris Grupa. In addition to that, AD Plastik is 1.73 times more volatile than Adris Grupa dd. It trades about -0.08 of its total potential returns per unit of risk. Adris Grupa dd is currently generating about -0.06 per unit of volatility. If you would invest  8,300  in Adris Grupa dd on September 5, 2024 and sell it today you would lose (300.00) from holding Adris Grupa dd or give up 3.61% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy75.44%
ValuesDaily Returns

AD Plastik dd  vs.  Adris Grupa dd

 Performance 
       Timeline  
AD Plastik dd 

Risk-Adjusted Performance

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Weak
 
Strong
Very Weak
Over the last 90 days AD Plastik 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 January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.
Adris Grupa dd 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
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.

AD Plastik and Adris Grupa Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with AD Plastik and Adris Grupa

The main advantage of trading using opposite AD Plastik and Adris Grupa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AD Plastik 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 AD Plastik 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.
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.

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