Correlation Between STACO INSURANCE and FIDSON HEALTHCARE

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

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

Diversification Opportunities for STACO INSURANCE and FIDSON HEALTHCARE

0.0

Correlation Coefficient

STACO INSURANCE  FIDSON HEALTHCARE

Pay attention - limited upside

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

Pair Corralation between STACO INSURANCE and FIDSON HEALTHCARE

If you would invest  1,550  in FIDSON HEALTHCARE PLC on December 30, 2024 and sell it today you would earn a total of  255.00  from holding FIDSON HEALTHCARE PLC or generate 16.45% return on investment over 90 days.

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

STACO INSURANCE PLC  vs.  FIDSON HEALTHCARE PLC

STACO INSURANCE PLC

Risk-Adjusted Performance

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 current stock price disturbance, may contribute to short-term losses for the investors.

FIDSON HEALTHCARE PLC

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in FIDSON HEALTHCARE PLC are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat inconsistent basic indicators, FIDSON HEALTHCARE sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with STACO INSURANCE and FIDSON HEALTHCARE

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

The idea behind STACO INSURANCE PLC and FIDSON HEALTHCARE 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..