Correlation Between Scisparc and InMed Pharmaceuticals

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

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

Diversification Opportunities for Scisparc and InMed Pharmaceuticals

0.47

Correlation Coefficient

Scisparc  InMed Pharmaceuticals

Very weak diversification

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

Pair Corralation between Scisparc and InMed Pharmaceuticals

Given the investment horizon of 90 days Scisparc is expected to under-perform the InMed Pharmaceuticals. But the stock apears to be less risky and, when comparing its historical volatility, Scisparc is 2.22 times less risky than InMed Pharmaceuticals. The stock trades about -0.14 of its potential returns per unit of risk. The InMed Pharmaceuticals is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  263.00  in InMed Pharmaceuticals on May 28, 2025 and sell it today you would lose (35.00) from holding InMed Pharmaceuticals or give up 13.31% of portfolio value over 90 days.

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

Scisparc  vs.  InMed Pharmaceuticals

Scisparc

Risk-Adjusted Performance

Weakest

Over the last 90 days Scisparc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in September 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

InMed Pharmaceuticals

Risk-Adjusted Performance

Weakest

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

Pair Trading with Scisparc and InMed Pharmaceuticals

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

The idea behind Scisparc and InMed Pharmaceuticals 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.