Correlation Between AD Plastik and Dalekovod

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

Diversification Opportunities for AD Plastik and Dalekovod

-0.72

Correlation Coefficient

AD Plastik  Dalekovod

Pay attention - limited upside

The 3 months correlation between ADPL and Dalekovod is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding AD Plastik dd and Dalekovod dd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dalekovod 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 Dalekovod. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dalekovod dd has no effect on the direction of AD Plastik i.e., AD Plastik and Dalekovod go up and down completely randomly.

Pair Corralation between AD Plastik and Dalekovod

Assuming the 90 days trading horizon AD Plastik dd is expected to under-perform the Dalekovod. In addition to that, AD Plastik is 1.22 times more volatile than Dalekovod dd. It trades about -0.08 of its total potential returns per unit of risk. Dalekovod dd is currently generating about 0.09 per unit of volatility. If you would invest  316.00  in Dalekovod dd on September 5, 2024 and sell it today you would earn a total of  32.00  from holding Dalekovod dd or generate 10.13% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	91.94%
Values	Daily Returns

AD Plastik dd  vs.  Dalekovod dd

AD Plastik dd

Risk-Adjusted Performance

0 of 100

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.

Dalekovod dd

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Dalekovod dd are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Dalekovod may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with AD Plastik and Dalekovod

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

The idea behind AD Plastik dd and Dalekovod 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.