Correlation Between Inspecs Group and Retractable Technologies
Can any of the company-specific risk be diversified away by investing in both Inspecs Group and Retractable Technologies 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 Inspecs Group and Retractable Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Inspecs Group plc and Retractable Technologies, you can compare the effects of market volatilities on Inspecs Group and Retractable Technologies 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 Inspecs Group with a short position of Retractable Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inspecs Group and Retractable Technologies.
Diversification Opportunities for Inspecs Group and Retractable Technologies
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Inspecs and Retractable is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Inspecs Group plc and Retractable Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Retractable Technologies and Inspecs Group 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 Inspecs Group plc are associated (or correlated) with Retractable Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Retractable Technologies has no effect on the direction of Inspecs Group i.e., Inspecs Group and Retractable Technologies go up and down completely randomly.
Pair Corralation between Inspecs Group and Retractable Technologies
Assuming the 90 days trading horizon Inspecs Group plc is expected to generate 1.35 times more return on investment than Retractable Technologies. However, Inspecs Group is 1.35 times more volatile than Retractable Technologies. It trades about 0.2 of its potential returns per unit of risk. Retractable Technologies is currently generating about 0.03 per unit of risk. If you would invest 4,300 in Inspecs Group plc on September 6, 2025 and sell it today you would earn a total of 2,950 from holding Inspecs Group plc or generate 68.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Inspecs Group plc vs. Retractable Technologies
Performance |
| Timeline |
| Inspecs Group plc |
| Retractable Technologies |
Inspecs Group and Retractable Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Inspecs Group and Retractable Technologies
The main advantage of trading using opposite Inspecs Group and Retractable Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inspecs Group position performs unexpectedly, Retractable Technologies 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 Retractable Technologies will offset losses from the drop in Retractable Technologies' long position.| Inspecs Group vs. Liberty Media Corp | Inspecs Group vs. One Media iP | Inspecs Group vs. Westlake Chemical Corp | Inspecs Group vs. Critical Metals Plc |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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