Correlation Between Secure Property and Inspiration Healthcare

Can any of the company-specific risk be diversified away by investing in both Secure Property and Inspiration Healthcare 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 Secure Property and Inspiration Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Secure Property Development and Inspiration Healthcare Group, you can compare the effects of market volatilities on Secure Property and Inspiration Healthcare 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 Secure Property with a short position of Inspiration Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Secure Property and Inspiration Healthcare.

Diversification Opportunities for Secure Property and Inspiration Healthcare

-0.11

Correlation Coefficient

Secure Property  Inspiration Healthcare

Good diversification

The 3 months correlation between Secure and Inspiration is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Secure Property Development and Inspiration Healthcare Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inspiration Healthcare and Secure Property 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 Secure Property Development are associated (or correlated) with Inspiration Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inspiration Healthcare has no effect on the direction of Secure Property i.e., Secure Property and Inspiration Healthcare go up and down completely randomly.

Pair Corralation between Secure Property and Inspiration Healthcare

Assuming the 90 days trading horizon Secure Property Development is expected to under-perform the Inspiration Healthcare. But the stock apears to be less risky and, when comparing its historical volatility, Secure Property Development is 2.51 times less risky than Inspiration Healthcare. The stock trades about -0.02 of its potential returns per unit of risk. The Inspiration Healthcare Group is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  1,250  in Inspiration Healthcare Group on December 30, 2024 and sell it today you would earn a total of  425.00  from holding Inspiration Healthcare Group or generate 34.0% return on investment over 90 days.

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

Secure Property Development  vs.  Inspiration Healthcare Group

Secure Property Deve

Risk-Adjusted Performance

Very Weak

Over the last 90 days Secure Property Development 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.

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.

Pair Trading with Secure Property and Inspiration Healthcare

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

The idea behind Secure Property Development and Inspiration Healthcare 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.

Check out your portfolio center.

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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.