Correlation Between Optima Health and Inspiration Healthcare
Can any of the company-specific risk be diversified away by investing in both Optima Health 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 Optima Health and Inspiration Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Optima Health plc and Inspiration Healthcare Group, you can compare the effects of market volatilities on Optima Health 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 Optima Health with a short position of Inspiration Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Optima Health and Inspiration Healthcare.
Diversification Opportunities for Optima Health and Inspiration Healthcare
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Optima and Inspiration is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Optima Health plc and Inspiration Healthcare Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inspiration Healthcare and Optima Health 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 Optima Health plc 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 Optima Health i.e., Optima Health and Inspiration Healthcare go up and down completely randomly.
Pair Corralation between Optima Health and Inspiration Healthcare
Assuming the 90 days trading horizon Optima Health plc is expected to generate 0.38 times more return on investment than Inspiration Healthcare. However, Optima Health plc is 2.61 times less risky than Inspiration Healthcare. It trades about -0.27 of its potential returns per unit of risk. Inspiration Healthcare Group is currently generating about -0.33 per unit of risk. If you would invest 16,150 in Optima Health plc on August 31, 2024 and sell it today you would lose (610.00) from holding Optima Health plc or give up 3.78% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Optima Health plc vs. Inspiration Healthcare Group
Performance |
| Timeline |
| Optima Health plc |
| Inspiration Healthcare |
Optima Health and Inspiration Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Optima Health and Inspiration Healthcare
The main advantage of trading using opposite Optima Health and Inspiration Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Optima Health 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.| Optima Health vs. Flow Traders NV | Optima Health vs. Impax Environmental Markets | Optima Health vs. Veolia Environnement VE | Optima Health vs. Indutrade AB |
| Inspiration Healthcare vs. Toyota Motor Corp | Inspiration Healthcare vs. SoftBank Group Corp | Inspiration Healthcare vs. State Bank of | Inspiration Healthcare vs. MOL Hungarian Oil |
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 CEOs Directory module to screen CEOs from public companies around the world.
Other Complementary Tools
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal |