Correlation Between GenIP PLC and Inspired Plc

Can any of the company-specific risk be diversified away by investing in both GenIP PLC and Inspired Plc 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 GenIP PLC and Inspired Plc into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for GenIP PLC and Inspired Plc

0.47

Correlation Coefficient

GenIP PLC  Inspired Plc

Very weak diversification

The 3 months correlation between GenIP and Inspired is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding GenIP PLC and Inspired Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inspired Plc and GenIP PLC 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 GenIP PLC are associated (or correlated) with Inspired Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inspired Plc has no effect on the direction of GenIP PLC i.e., GenIP PLC and Inspired Plc go up and down completely randomly.

Pair Corralation between GenIP PLC and Inspired Plc

Assuming the 90 days trading horizon GenIP PLC is expected to generate 3.25 times less return on investment than Inspired Plc. In addition to that, GenIP PLC is 3.27 times more volatile than Inspired Plc. It trades about 0.02 of its total potential returns per unit of risk. Inspired Plc is currently generating about 0.24 per unit of volatility. If you would invest  6,487  in Inspired Plc on April 20, 2025 and sell it today you would earn a total of  1,563  from holding Inspired Plc or generate 24.09% return on investment over 90 days.

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

GenIP PLC  vs.  Inspired Plc

GenIP PLC

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in GenIP PLC are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, GenIP PLC may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Inspired Plc

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Inspired Plc are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Inspired Plc unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with GenIP PLC and Inspired Plc

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

The idea behind GenIP PLC and Inspired 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.