Correlation Between Zagrebacka Banka and Atlantic Grupa

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

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

Diversification Opportunities for Zagrebacka Banka and Atlantic Grupa

0.37

Correlation Coefficient

Zagrebacka Banka  Atlantic Grupa

Weak diversification

The 3 months correlation between Zagrebacka and Atlantic is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Zagrebacka Banka dd and Atlantic Grupa dd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atlantic Grupa dd and Zagrebacka Banka 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 Zagrebacka Banka dd are associated (or correlated) with Atlantic Grupa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atlantic Grupa dd has no effect on the direction of Zagrebacka Banka i.e., Zagrebacka Banka and Atlantic Grupa go up and down completely randomly.

Pair Corralation between Zagrebacka Banka and Atlantic Grupa

Assuming the 90 days trading horizon Zagrebacka Banka dd is expected to generate 1.21 times more return on investment than Atlantic Grupa. However, Zagrebacka Banka is 1.21 times more volatile than Atlantic Grupa dd. It trades about 0.33 of its potential returns per unit of risk. Atlantic Grupa dd is currently generating about 0.02 per unit of risk. If you would invest  1,925  in Zagrebacka Banka dd on September 5, 2024 and sell it today you would earn a total of  565.00  from holding Zagrebacka Banka dd or generate 29.35% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	88.71%
Values	Daily Returns

Zagrebacka Banka dd  vs.  Atlantic Grupa dd

Zagrebacka Banka

Risk-Adjusted Performance

25 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Zagrebacka Banka dd are ranked lower than 25 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Zagrebacka Banka unveiled solid returns over the last few months and may actually be approaching a breakup point.

Atlantic Grupa dd

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Atlantic Grupa dd are ranked lower than 1 (%) 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.

Pair Trading with Zagrebacka Banka and Atlantic Grupa

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

The idea behind Zagrebacka Banka dd and Atlantic 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.

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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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.