Correlation Between Indara Insurance and Praram 9

Can any of the company-specific risk be diversified away by investing in both Indara Insurance and Praram 9 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 Indara Insurance and Praram 9 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Indara Insurance Public and Praram 9 Hospital, you can compare the effects of market volatilities on Indara Insurance and Praram 9 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 Indara Insurance with a short position of Praram 9. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indara Insurance and Praram 9.

Diversification Opportunities for Indara Insurance and Praram 9

-0.78

Correlation Coefficient

Indara Insurance  Praram 9

Pay attention - limited upside

The 3 months correlation between Indara and Praram is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Indara Insurance Public and Praram 9 Hospital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Praram 9 Hospital and Indara Insurance 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 Indara Insurance Public are associated (or correlated) with Praram 9. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Praram 9 Hospital has no effect on the direction of Indara Insurance i.e., Indara Insurance and Praram 9 go up and down completely randomly.

Pair Corralation between Indara Insurance and Praram 9

Assuming the 90 days trading horizon Indara Insurance Public is expected to under-perform the Praram 9. In addition to that, Indara Insurance is 1.57 times more volatile than Praram 9 Hospital. It trades about -0.06 of its total potential returns per unit of risk. Praram 9 Hospital is currently generating about 0.2 per unit of volatility. If you would invest  2,038  in Praram 9 Hospital on September 13, 2024 and sell it today you would earn a total of  487.00  from holding Praram 9 Hospital or generate 23.9% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Indara Insurance Public  vs.  Praram 9 Hospital

Indara Insurance Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Indara Insurance Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Praram 9 Hospital

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Praram 9 Hospital are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting basic indicators, Praram 9 disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Indara Insurance and Praram 9

The main advantage of trading using opposite Indara Insurance and Praram 9 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Indara Insurance position performs unexpectedly, Praram 9 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 Praram 9 will offset losses from the drop in Praram 9's long position.

The idea behind Indara Insurance Public and Praram 9 Hospital 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.