Correlation Between Inspire Medical and WIMFARM SA
Can any of the company-specific risk be diversified away by investing in both Inspire Medical and WIMFARM SA 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 WIMFARM SA 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 WIMFARM SA EO, you can compare the effects of market volatilities on Inspire Medical and WIMFARM SA 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 WIMFARM SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inspire Medical and WIMFARM SA.
Diversification Opportunities for Inspire Medical and WIMFARM SA
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Inspire and WIMFARM is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Inspire Medical Systems and WIMFARM SA EO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WIMFARM SA EO 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 WIMFARM SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WIMFARM SA EO has no effect on the direction of Inspire Medical i.e., Inspire Medical and WIMFARM SA go up and down completely randomly.
Pair Corralation between Inspire Medical and WIMFARM SA
Assuming the 90 days horizon Inspire Medical Systems is expected to under-perform the WIMFARM SA. But the stock apears to be less risky and, when comparing its historical volatility, Inspire Medical Systems is 1.44 times less risky than WIMFARM SA. The stock trades about -0.05 of its potential returns per unit of risk. The WIMFARM SA EO is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 363.00 in WIMFARM SA EO on October 28, 2024 and sell it today you would earn a total of 12.00 from holding WIMFARM SA EO or generate 3.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Inspire Medical Systems vs. WIMFARM SA EO
Performance |
| Timeline |
| Inspire Medical Systems |
| WIMFARM SA EO |
Inspire Medical and WIMFARM SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Inspire Medical and WIMFARM SA
The main advantage of trading using opposite Inspire Medical and WIMFARM SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inspire Medical position performs unexpectedly, WIMFARM SA 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 WIMFARM SA will offset losses from the drop in WIMFARM SA's long position.| Inspire Medical vs. Abbott Laboratories | Inspire Medical vs. Abbott Laboratories | Inspire Medical vs. Medtronic PLC | Inspire Medical vs. Stryker |
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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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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