Correlation Between Inspiration Healthcare and Catena Media

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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

InspirationCatenaDiversified AwayInspirationCatenaDiversified Away100%
-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 Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy99.79%
ValuesDaily Returns

Inspiration Healthcare Group  vs.  Catena Media PLC

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -20-1001020
JavaScript chart by amCharts 3.21.15IHC 0RUE
       Timeline  
Inspiration Healthcare 

Risk-Adjusted Performance

Insignificant

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Inspiration Healthcare Group are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Inspiration Healthcare exhibited solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb121416182022242628
Catena Media PLC 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Catena Media PLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb4567891011

Inspiration Healthcare and Catena Media Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-34.85-26.1-17.35-8.60.08.8617.8726.8935.9 0.0040.0060.0080.0100.012
JavaScript chart by amCharts 3.21.15IHC 0RUE
       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.
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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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.

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