Correlation Between Inspiration Healthcare and M Winkworth

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

Diversification Opportunities for Inspiration Healthcare and M Winkworth

0.0

Correlation Coefficient

Inspiration Healthcare  M Winkworth

Pay attention - limited upside

The 3 months correlation between Inspiration and WINK is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Inspiration Healthcare Group and M Winkworth PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on M Winkworth 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 M Winkworth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of M Winkworth PLC has no effect on the direction of Inspiration Healthcare i.e., Inspiration Healthcare and M Winkworth go up and down completely randomly.

Pair Corralation between Inspiration Healthcare and M Winkworth

If you would invest  1,250  in Inspiration Healthcare Group on December 23, 2024 and sell it today you would earn a total of  400.00  from holding Inspiration Healthcare Group or generate 32.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Inspiration Healthcare Group  vs.  M Winkworth PLC

Inspiration Healthcare

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Inspiration Healthcare Group are ranked lower than 6 (%) 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.

M Winkworth PLC

Risk-Adjusted Performance

Weak

Over the last 90 days M Winkworth PLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, M Winkworth is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Inspiration Healthcare and M Winkworth

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

The idea behind Inspiration Healthcare Group and M Winkworth 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.