Correlation Between Issachar Fund and Inspire International

Can any of the company-specific risk be diversified away by investing in both Issachar Fund and Inspire International 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 Issachar Fund and Inspire International into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Issachar Fund Class and Inspire International ESG, you can compare the effects of market volatilities on Issachar Fund and Inspire International 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 Issachar Fund with a short position of Inspire International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Issachar Fund and Inspire International.

Diversification Opportunities for Issachar Fund and Inspire International

-0.68

Correlation Coefficient

Issachar Fund  Inspire International

Excellent diversification

The 3 months correlation between Issachar and Inspire is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Issachar Fund Class and Inspire International ESG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inspire International ESG and Issachar Fund 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 Issachar Fund Class are associated (or correlated) with Inspire International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inspire International ESG has no effect on the direction of Issachar Fund i.e., Issachar Fund and Inspire International go up and down completely randomly.

Pair Corralation between Issachar Fund and Inspire International

Assuming the 90 days horizon Issachar Fund is expected to generate 8.39 times less return on investment than Inspire International. But when comparing it to its historical volatility, Issachar Fund Class is 1.16 times less risky than Inspire International. It trades about 0.0 of its potential returns per unit of risk. Inspire International ESG is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  2,651  in Inspire International ESG on September 29, 2024 and sell it today you would earn a total of  263.00  from holding Inspire International ESG or generate 9.92% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	99.79%
Values	Daily Returns

Issachar Fund Class  vs.  Inspire International ESG

Issachar Fund Class

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Issachar Fund Class are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Issachar Fund may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Inspire International ESG

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Inspire International ESG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Etf's forward-looking indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the fund shareholders.

Pair Trading with Issachar Fund and Inspire International

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

The idea behind Issachar Fund Class and Inspire International ESG 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.