Correlation Between Inspire Medical and Auto Trader
Can any of the company-specific risk be diversified away by investing in both Inspire Medical and Auto Trader 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 Inspire Medical and Auto Trader into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Inspire Medical Systems and Auto Trader Group, you can compare the effects of market volatilities on Inspire Medical and Auto Trader 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 Inspire Medical with a short position of Auto Trader. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inspire Medical and Auto Trader.
Diversification Opportunities for Inspire Medical and Auto Trader
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Inspire and Auto is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Inspire Medical Systems and Auto Trader Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Auto Trader Group and Inspire Medical 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 Inspire Medical Systems are associated (or correlated) with Auto Trader. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Auto Trader Group has no effect on the direction of Inspire Medical i.e., Inspire Medical and Auto Trader go up and down completely randomly.
Pair Corralation between Inspire Medical and Auto Trader
Assuming the 90 days horizon Inspire Medical is expected to generate 1.8 times less return on investment than Auto Trader. In addition to that, Inspire Medical is 2.33 times more volatile than Auto Trader Group. It trades about 0.01 of its total potential returns per unit of risk. Auto Trader Group is currently generating about 0.05 per unit of volatility. If you would invest 650.00 in Auto Trader Group on October 13, 2024 and sell it today you would earn a total of 275.00 from holding Auto Trader Group or generate 42.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Inspire Medical Systems vs. Auto Trader Group
Performance |
| Timeline |
| Inspire Medical Systems |
| Auto Trader Group |
Inspire Medical and Auto Trader Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Inspire Medical and Auto Trader
The main advantage of trading using opposite Inspire Medical and Auto Trader positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inspire Medical position performs unexpectedly, Auto Trader 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 Auto Trader will offset losses from the drop in Auto Trader's long position.| Inspire Medical vs. Japan Post Insurance | Inspire Medical vs. Direct Line Insurance | Inspire Medical vs. Reinsurance Group of | Inspire Medical vs. HANOVER INSURANCE |
| Auto Trader vs. CompuGroup Medical SE | Auto Trader vs. SK TELECOM TDADR | Auto Trader vs. Diamyd Medical AB | Auto Trader vs. INTERSHOP Communications Aktiengesellschaft |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
Other Complementary Tools
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets |