Correlation Between Military Insurance and Daklak Pharmaceutical

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

By analyzing existing cross correlation between Military Insurance Corp and Daklak Pharmaceutical Medical, you can compare the effects of market volatilities on Military Insurance and Daklak Pharmaceutical 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 Military Insurance with a short position of Daklak Pharmaceutical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Military Insurance and Daklak Pharmaceutical.

Diversification Opportunities for Military Insurance and Daklak Pharmaceutical

0.0

Correlation Coefficient

Military Insurance  Daklak Pharmaceutical

Pay attention - limited upside

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

Pair Corralation between Military Insurance and Daklak Pharmaceutical

If you would invest  1,710,220  in Military Insurance Corp on September 25, 2024 and sell it today you would earn a total of  144,780  from holding Military Insurance Corp or generate 8.47% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Military Insurance Corp  vs.  Daklak Pharmaceutical Medical

Military Insurance Corp

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Military Insurance Corp are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating technical and fundamental indicators, Military Insurance may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Daklak Pharmaceutical

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Daklak Pharmaceutical Medical has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy fundamental drivers, Daklak Pharmaceutical is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Military Insurance and Daklak Pharmaceutical

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

The idea behind Military Insurance Corp and Daklak Pharmaceutical Medical 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.