Correlation Between Indara Insurance and Communication System

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

Diversification Opportunities for Indara Insurance and Communication System

-0.15

Correlation Coefficient

Indara Insurance  Communication System

Good diversification

The 3 months correlation between Indara and Communication is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Indara Insurance Public and Communication System Solution in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Communication System 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 Communication System. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Communication System has no effect on the direction of Indara Insurance i.e., Indara Insurance and Communication System go up and down completely randomly.

Pair Corralation between Indara Insurance and Communication System

Assuming the 90 days trading horizon Indara Insurance Public is expected to under-perform the Communication System. In addition to that, Indara Insurance is 1.36 times more volatile than Communication System Solution. It trades about -0.2 of its total potential returns per unit of risk. Communication System Solution is currently generating about 0.04 per unit of volatility. If you would invest  79.00  in Communication System Solution on April 23, 2025 and sell it today you would earn a total of  2.00  from holding Communication System Solution or generate 2.53% return on investment over 90 days.

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

Indara Insurance Public  vs.  Communication System Solution

Indara Insurance Public

Risk-Adjusted Performance

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 conflicting performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in August 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Communication System

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Communication System Solution are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, Communication System is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Indara Insurance and Communication System

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

The idea behind Indara Insurance Public and Communication System Solution 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.