Correlation Between Atlantic Grupa and Podravka Prehrambena

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

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

Diversification Opportunities for Atlantic Grupa and Podravka Prehrambena

-0.35

Correlation Coefficient

Atlantic Grupa  Podravka Prehrambena

Very good diversification

The 3 months correlation between Atlantic and Podravka is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Atlantic Grupa dd and Podravka Prehrambena Industrij in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Podravka Prehrambena and Atlantic Grupa 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 Atlantic Grupa dd are associated (or correlated) with Podravka Prehrambena. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Podravka Prehrambena has no effect on the direction of Atlantic Grupa i.e., Atlantic Grupa and Podravka Prehrambena go up and down completely randomly.

Pair Corralation between Atlantic Grupa and Podravka Prehrambena

Assuming the 90 days trading horizon Atlantic Grupa dd is expected to generate 0.98 times more return on investment than Podravka Prehrambena. However, Atlantic Grupa dd is 1.02 times less risky than Podravka Prehrambena. It trades about 0.04 of its potential returns per unit of risk. Podravka Prehrambena Industrija is currently generating about -0.28 per unit of risk. If you would invest  5,100  in Atlantic Grupa dd on September 12, 2024 and sell it today you would earn a total of  100.00  from holding Atlantic Grupa dd or generate 1.96% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	88.52%
Values	Daily Returns

Atlantic Grupa dd  vs.  Podravka Prehrambena Industrij

Atlantic Grupa dd

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Atlantic Grupa dd are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Atlantic Grupa is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Podravka Prehrambena

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Podravka Prehrambena Industrija 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.

Pair Trading with Atlantic Grupa and Podravka Prehrambena

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

The idea behind Atlantic Grupa dd and Podravka Prehrambena Industrija 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.