Correlation Between Inspiration Healthcare and Atalaya Mining
Can any of the company-specific risk be diversified away by investing in both Inspiration Healthcare and Atalaya Mining 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 Atalaya Mining 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 Atalaya Mining, you can compare the effects of market volatilities on Inspiration Healthcare and Atalaya Mining 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 Atalaya Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inspiration Healthcare and Atalaya Mining.
Diversification Opportunities for Inspiration Healthcare and Atalaya Mining
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Inspiration and Atalaya is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Inspiration Healthcare Group and Atalaya Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atalaya Mining 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 Atalaya Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atalaya Mining has no effect on the direction of Inspiration Healthcare i.e., Inspiration Healthcare and Atalaya Mining go up and down completely randomly.
Pair Corralation between Inspiration Healthcare and Atalaya Mining
Assuming the 90 days trading horizon Inspiration Healthcare Group is expected to under-perform the Atalaya Mining. In addition to that, Inspiration Healthcare is 1.13 times more volatile than Atalaya Mining. It trades about -0.09 of its total potential returns per unit of risk. Atalaya Mining is currently generating about -0.05 per unit of volatility. If you would invest 37,400 in Atalaya Mining on November 7, 2024 and sell it today you would lose (2,650) from holding Atalaya Mining or give up 7.09% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Inspiration Healthcare Group vs. Atalaya Mining
Performance |
| Timeline |
| Inspiration Healthcare |
| Atalaya Mining |
Inspiration Healthcare and Atalaya Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Inspiration Healthcare and Atalaya Mining
The main advantage of trading using opposite Inspiration Healthcare and Atalaya Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inspiration Healthcare position performs unexpectedly, Atalaya Mining 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 Atalaya Mining will offset losses from the drop in Atalaya Mining's long position.| Inspiration Healthcare vs. European Metals Holdings | Inspiration Healthcare vs. Sealed Air Corp | Inspiration Healthcare vs. Zoom Video Communications | Inspiration Healthcare vs. Qurate Retail Series |
| Atalaya Mining vs. Wheaton Precious Metals | Atalaya Mining vs. Dairy Farm International | Atalaya Mining vs. European Metals Holdings | Atalaya Mining vs. Ecofin Global Utilities |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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