Correlation Between FIDSON HEALTHCARE and STACO INSURANCE

Can any of the company-specific risk be diversified away by investing in both FIDSON HEALTHCARE and STACO 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 FIDSON HEALTHCARE and STACO INSURANCE into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between FIDSON HEALTHCARE PLC and STACO INSURANCE PLC, you can compare the effects of market volatilities on FIDSON HEALTHCARE and STACO 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 FIDSON HEALTHCARE with a short position of STACO INSURANCE. Check out your portfolio center. Please also check ongoing floating volatility patterns of FIDSON HEALTHCARE and STACO INSURANCE.

Diversification Opportunities for FIDSON HEALTHCARE and STACO INSURANCE

0.0

Correlation Coefficient

FIDSON HEALTHCARE  STACO INSURANCE

Pay attention - limited upside

The 3 months correlation between FIDSON and STACO is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding FIDSON HEALTHCARE PLC and STACO INSURANCE PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STACO INSURANCE PLC and FIDSON HEALTHCARE 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 FIDSON HEALTHCARE PLC are associated (or correlated) with STACO INSURANCE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STACO INSURANCE PLC has no effect on the direction of FIDSON HEALTHCARE i.e., FIDSON HEALTHCARE and STACO INSURANCE go up and down completely randomly.

Pair Corralation between FIDSON HEALTHCARE and STACO INSURANCE

If you would invest  1,575  in FIDSON HEALTHCARE PLC on October 20, 2024 and sell it today you would earn a total of  150.00  from holding FIDSON HEALTHCARE PLC or generate 9.52% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

FIDSON HEALTHCARE PLC  vs.  STACO INSURANCE PLC

FIDSON HEALTHCARE PLC

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in FIDSON HEALTHCARE PLC are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unsteady basic indicators, FIDSON HEALTHCARE may actually be approaching a critical reversion point that can send shares even higher in February 2025.

STACO INSURANCE PLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days STACO INSURANCE PLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong fundamental indicators, STACO INSURANCE is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with FIDSON HEALTHCARE and STACO INSURANCE

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

The idea behind FIDSON HEALTHCARE PLC and STACO INSURANCE PLC 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.