Correlation Between Spire Healthcare and Triad Group

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

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

Diversification Opportunities for Spire Healthcare and Triad Group

-0.23

Correlation Coefficient

Spire Healthcare  Triad Group

Very good diversification

The 3 months correlation between Spire and Triad is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Spire Healthcare Group and Triad Group PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Triad Group PLC and Spire 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 Spire Healthcare Group are associated (or correlated) with Triad Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Triad Group PLC has no effect on the direction of Spire Healthcare i.e., Spire Healthcare and Triad Group go up and down completely randomly.

Pair Corralation between Spire Healthcare and Triad Group

Assuming the 90 days trading horizon Spire Healthcare Group is expected to under-perform the Triad Group. In addition to that, Spire Healthcare is 1.28 times more volatile than Triad Group PLC. It trades about -0.15 of its total potential returns per unit of risk. Triad Group PLC is currently generating about 0.22 per unit of volatility. If you would invest  28,000  in Triad Group PLC on December 22, 2024 and sell it today you would earn a total of  8,000  from holding Triad Group PLC or generate 28.57% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

Spire Healthcare Group  vs.  Triad Group PLC

Spire Healthcare

Risk-Adjusted Performance

Very Weak

Over the last 90 days Spire 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 April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Triad Group PLC

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Triad Group PLC are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Triad Group exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Spire Healthcare and Triad Group

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

The idea behind Spire Healthcare Group and Triad Group 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.