Correlation Between Indara Insurance and SC Asset

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

Diversification Opportunities for Indara Insurance and SC Asset

0.39

Correlation Coefficient

Indara Insurance  SC Asset

Weak diversification

The 3 months correlation between Indara and SC Asset is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Indara Insurance Public and SC Asset in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SC Asset 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 SC Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SC Asset has no effect on the direction of Indara Insurance i.e., Indara Insurance and SC Asset go up and down completely randomly.

Pair Corralation between Indara Insurance and SC Asset

Assuming the 90 days trading horizon Indara Insurance Public is expected to under-perform the SC Asset. In addition to that, Indara Insurance is 1.78 times more volatile than SC Asset. It trades about -0.07 of its total potential returns per unit of risk. SC Asset is currently generating about -0.01 per unit of volatility. If you would invest  288.00  in SC Asset on September 14, 2024 and sell it today you would lose (6.00) from holding SC Asset or give up 2.08% of portfolio value over 90 days.

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

Indara Insurance Public  vs.  SC Asset

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.

SC Asset

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SC Asset has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent fundamental drivers, SC Asset is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Indara Insurance and SC Asset

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

The idea behind Indara Insurance Public and SC Asset 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.