Correlation Between Inspiration Healthcare and Roebuck Food

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

Diversification Opportunities for Inspiration Healthcare and Roebuck Food

-0.42

Correlation Coefficient

Inspiration Healthcare  Roebuck Food

Very good diversification

The 3 months correlation between Inspiration and Roebuck is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Inspiration Healthcare Group and Roebuck Food Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Roebuck Food Group 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 Roebuck Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Roebuck Food Group has no effect on the direction of Inspiration Healthcare i.e., Inspiration Healthcare and Roebuck Food go up and down completely randomly.

Pair Corralation between Inspiration Healthcare and Roebuck Food

Assuming the 90 days trading horizon Inspiration Healthcare Group is expected to under-perform the Roebuck Food. In addition to that, Inspiration Healthcare is 3.04 times more volatile than Roebuck Food Group. It trades about -0.06 of its total potential returns per unit of risk. Roebuck Food Group is currently generating about 0.09 per unit of volatility. If you would invest  1,100  in Roebuck Food Group on October 22, 2024 and sell it today you would earn a total of  650.00  from holding Roebuck Food Group or generate 59.09% 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.  Roebuck Food Group

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 unsteady performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Roebuck Food Group

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Roebuck Food Group are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, Roebuck Food is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Inspiration Healthcare and Roebuck Food

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

The idea behind Inspiration Healthcare Group and Roebuck Food Group 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.