Correlation Between Inspiration Healthcare and Greenroc Mining

Can any of the company-specific risk be diversified away by investing in both Inspiration Healthcare and Greenroc Mining 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 Greenroc Mining 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 Greenroc Mining PLC, you can compare the effects of market volatilities on Inspiration Healthcare and Greenroc Mining 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 Greenroc Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inspiration Healthcare and Greenroc Mining.

Diversification Opportunities for Inspiration Healthcare and Greenroc Mining

-0.58

Correlation Coefficient

Inspiration Healthcare  Greenroc Mining

Excellent diversification

The 3 months correlation between Inspiration and Greenroc is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Inspiration Healthcare Group and Greenroc Mining PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Greenroc Mining 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 Greenroc Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Greenroc Mining PLC has no effect on the direction of Inspiration Healthcare i.e., Inspiration Healthcare and Greenroc Mining go up and down completely randomly.

Pair Corralation between Inspiration Healthcare and Greenroc Mining

Assuming the 90 days trading horizon Inspiration Healthcare Group is expected to under-perform the Greenroc Mining. But the stock apears to be less risky and, when comparing its historical volatility, Inspiration Healthcare Group is 1.99 times less risky than Greenroc Mining. The stock trades about -0.28 of its potential returns per unit of risk. The Greenroc Mining PLC is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  140.00  in Greenroc Mining PLC on September 5, 2024 and sell it today you would earn a total of  5.00  from holding Greenroc Mining PLC or generate 3.57% return on investment over 90 days.

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

Inspiration Healthcare Group  vs.  Greenroc Mining PLC

Inspiration Healthcare

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Inspiration Healthcare Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Greenroc Mining PLC

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Greenroc Mining PLC are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Greenroc Mining may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Inspiration Healthcare and Greenroc Mining

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

The idea behind Inspiration Healthcare Group and Greenroc Mining 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.