Correlation Between Inspiration Healthcare and Catena Media
Can any of the company-specific risk be diversified away by investing in both Inspiration Healthcare and Catena Media 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 Inspiration Healthcare and Catena Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Inspiration Healthcare Group and Catena Media PLC, you can compare the effects of market volatilities on Inspiration Healthcare and Catena Media 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 Inspiration Healthcare with a short position of Catena Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inspiration Healthcare and Catena Media.
Diversification Opportunities for Inspiration Healthcare and Catena Media
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Inspiration and Catena is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Inspiration Healthcare Group and Catena Media PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catena Media PLC and Inspiration 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 Inspiration Healthcare Group are associated (or correlated) with Catena Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catena Media PLC has no effect on the direction of Inspiration Healthcare i.e., Inspiration Healthcare and Catena Media go up and down completely randomly.
Pair Corralation between Inspiration Healthcare and Catena Media
Assuming the 90 days trading horizon Inspiration Healthcare Group is expected to generate 1.32 times more return on investment than Catena Media. However, Inspiration Healthcare is 1.32 times more volatile than Catena Media PLC. It trades about -0.01 of its potential returns per unit of risk. Catena Media PLC is currently generating about -0.08 per unit of risk. If you would invest 4,936 in Inspiration Healthcare Group on November 27, 2024 and sell it today you would lose (3,111) from holding Inspiration Healthcare Group or give up 63.03% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 99.79% |
Values | Daily Returns |
Inspiration Healthcare Group vs. Catena Media PLC
Performance |
Timeline |
Inspiration Healthcare |
Catena Media PLC |
Inspiration Healthcare and Catena Media Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Inspiration Healthcare and Catena Media
The main advantage of trading using opposite Inspiration Healthcare and Catena Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inspiration Healthcare position performs unexpectedly, Catena Media 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 Catena Media will offset losses from the drop in Catena Media's long position.The idea behind Inspiration Healthcare Group and Catena Media 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.
Catena Media vs. Supermarket Income REIT | ||
Catena Media vs. Leroy Seafood Group | ||
Catena Media vs. Molson Coors Beverage | ||
Catena Media vs. Edita Food Industries |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
Other Complementary Tools
Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments |