Correlation Between Inspiration Healthcare and Secure Property

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

Diversification Opportunities for Inspiration Healthcare and Secure Property

-0.59

Correlation Coefficient

Inspiration Healthcare  Secure Property

Excellent diversification

The 3 months correlation between Inspiration and Secure is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Inspiration Healthcare Group and Secure Property Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Secure Property Deve 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 Secure Property. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Secure Property Deve has no effect on the direction of Inspiration Healthcare i.e., Inspiration Healthcare and Secure Property go up and down completely randomly.

Pair Corralation between Inspiration Healthcare and Secure Property

Assuming the 90 days trading horizon Inspiration Healthcare Group is expected to under-perform the Secure Property. In addition to that, Inspiration Healthcare is 1.38 times more volatile than Secure Property Development. It trades about -0.28 of its total potential returns per unit of risk. Secure Property Development is currently generating about 0.12 per unit of volatility. If you would invest  400.00  in Secure Property Development on September 5, 2024 and sell it today you would earn a total of  50.00  from holding Secure Property Development or generate 12.5% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.46%
Values	Daily Returns

Inspiration Healthcare Group  vs.  Secure Property Development

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 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 January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Secure Property Deve

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Secure Property Development are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Secure Property may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Inspiration Healthcare and Secure Property

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

The idea behind Inspiration Healthcare Group and Secure Property Development 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.