Correlation Between Inspiration Healthcare and BE Semiconductor

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

Diversification Opportunities for Inspiration Healthcare and BE Semiconductor

0.79

Correlation Coefficient

Inspiration Healthcare  BE Semiconductor

Poor diversification

The 3 months correlation between Inspiration and 0XVE is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Inspiration Healthcare Group and BE Semiconductor Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BE Semiconductor Ind 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 BE Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BE Semiconductor Ind has no effect on the direction of Inspiration Healthcare i.e., Inspiration Healthcare and BE Semiconductor go up and down completely randomly.

Pair Corralation between Inspiration Healthcare and BE Semiconductor

Assuming the 90 days trading horizon Inspiration Healthcare is expected to generate 1.28 times less return on investment than BE Semiconductor. In addition to that, Inspiration Healthcare is 1.4 times more volatile than BE Semiconductor Industries. It trades about 0.13 of its total potential returns per unit of risk. BE Semiconductor Industries is currently generating about 0.23 per unit of volatility. If you would invest  9,389  in BE Semiconductor Industries on April 23, 2025 and sell it today you would earn a total of  3,446  from holding BE Semiconductor Industries or generate 36.7% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Inspiration Healthcare Group  vs.  BE Semiconductor Industries

Inspiration Healthcare

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Inspiration Healthcare Group are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Inspiration Healthcare exhibited solid returns over the last few months and may actually be approaching a breakup point.

BE Semiconductor Ind

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in BE Semiconductor Industries are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, BE Semiconductor unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Inspiration Healthcare and BE Semiconductor

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

The idea behind Inspiration Healthcare Group and BE Semiconductor Industries 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.

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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.