Correlation Between Inspire Medical and GREENLIGHT CAP
Can any of the company-specific risk be diversified away by investing in both Inspire Medical and GREENLIGHT CAP 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 GREENLIGHT CAP 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 GREENLIGHT CAP RE, you can compare the effects of market volatilities on Inspire Medical and GREENLIGHT CAP 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 GREENLIGHT CAP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inspire Medical and GREENLIGHT CAP.
Diversification Opportunities for Inspire Medical and GREENLIGHT CAP
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Inspire and GREENLIGHT is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Inspire Medical Systems and GREENLIGHT CAP RE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GREENLIGHT CAP RE 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 GREENLIGHT CAP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GREENLIGHT CAP RE has no effect on the direction of Inspire Medical i.e., Inspire Medical and GREENLIGHT CAP go up and down completely randomly.
Pair Corralation between Inspire Medical and GREENLIGHT CAP
Assuming the 90 days horizon Inspire Medical is expected to generate 12.92 times less return on investment than GREENLIGHT CAP. In addition to that, Inspire Medical is 2.12 times more volatile than GREENLIGHT CAP RE. It trades about 0.0 of its total potential returns per unit of risk. GREENLIGHT CAP RE is currently generating about 0.05 per unit of volatility. If you would invest 865.00 in GREENLIGHT CAP RE on October 28, 2024 and sell it today you would earn a total of 425.00 from holding GREENLIGHT CAP RE or generate 49.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Inspire Medical Systems vs. GREENLIGHT CAP RE
Performance |
| Timeline |
| Inspire Medical Systems |
| GREENLIGHT CAP RE |
Inspire Medical and GREENLIGHT CAP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Inspire Medical and GREENLIGHT CAP
The main advantage of trading using opposite Inspire Medical and GREENLIGHT CAP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inspire Medical position performs unexpectedly, GREENLIGHT CAP 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 GREENLIGHT CAP will offset losses from the drop in GREENLIGHT CAP's long position.| Inspire Medical vs. Abbott Laboratories | Inspire Medical vs. Abbott Laboratories | Inspire Medical vs. Medtronic PLC | Inspire Medical vs. Stryker |
| GREENLIGHT CAP vs. Iridium Communications | GREENLIGHT CAP vs. China Communications Services | GREENLIGHT CAP vs. SIEM OFFSHORE NEW | GREENLIGHT CAP vs. Scandinavian Tobacco Group |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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