Correlation Between TISCO Financial and Indara Insurance

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

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

Diversification Opportunities for TISCO Financial and Indara Insurance

0.45

Correlation Coefficient

TISCO Financial  Indara Insurance

Very weak diversification

The 3 months correlation between TISCO and Indara is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding TISCO Financial Group and Indara Insurance Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Indara Insurance Public and TISCO Financial 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 TISCO Financial Group are associated (or correlated) with Indara Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Indara Insurance Public has no effect on the direction of TISCO Financial i.e., TISCO Financial and Indara Insurance go up and down completely randomly.

Pair Corralation between TISCO Financial and Indara Insurance

Assuming the 90 days trading horizon TISCO Financial Group is expected to generate 0.14 times more return on investment than Indara Insurance. However, TISCO Financial Group is 7.31 times less risky than Indara Insurance. It trades about 0.01 of its potential returns per unit of risk. Indara Insurance Public is currently generating about -0.05 per unit of risk. If you would invest  9,725  in TISCO Financial Group on September 17, 2024 and sell it today you would earn a total of  25.00  from holding TISCO Financial Group or generate 0.26% return on investment over 90 days.

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

TISCO Financial Group  vs.  Indara Insurance Public

TISCO Financial Group

Risk-Adjusted Performance

0 of 100

Insignificant

Over the last 90 days TISCO Financial Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental drivers, TISCO Financial is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

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.

Pair Trading with TISCO Financial and Indara Insurance

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

The idea behind TISCO Financial Group and Indara Insurance Public 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.