Correlation Between Inspire Global and Inspire International

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

By analyzing existing cross correlation between Inspire Global Hope and Inspire International ESG, you can compare the effects of market volatilities on Inspire Global and Inspire International 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 Inspire Global with a short position of Inspire International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inspire Global and Inspire International.

Diversification Opportunities for Inspire Global and Inspire International

0.72

Correlation Coefficient

Inspire Global  Inspire International

Poor diversification

The 3 months correlation between Inspire and Inspire is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Inspire Global Hope and Inspire International ESG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inspire International ESG and Inspire Global 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 Inspire Global Hope are associated (or correlated) with Inspire International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inspire International ESG has no effect on the direction of Inspire Global i.e., Inspire Global and Inspire International go up and down completely randomly.

Pair Corralation between Inspire Global and Inspire International

Given the investment horizon of 90 days Inspire Global Hope is expected to under-perform the Inspire International. In addition to that, Inspire Global is 1.08 times more volatile than Inspire International ESG. It trades about -0.32 of its total potential returns per unit of risk. Inspire International ESG is currently generating about -0.22 per unit of volatility. If you would invest  3,006  in Inspire International ESG on October 3, 2024 and sell it today you would lose (106.00) from holding Inspire International ESG or give up 3.53% of portfolio value over 90 days.

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

Inspire Global Hope  vs.  Inspire International ESG

Inspire Global Hope

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Inspire Global Hope has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable technical and fundamental indicators, Inspire Global is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Inspire International ESG

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Inspire International ESG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest conflicting performance, the Etf's forward-looking indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the fund shareholders.

Pair Trading with Inspire Global and Inspire International

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

The idea behind Inspire Global Hope and Inspire International ESG 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.