Correlation Between Inspire Medical and NTG Nordic
Can any of the company-specific risk be diversified away by investing in both Inspire Medical and NTG Nordic 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 NTG Nordic 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 NTG Nordic Transport, you can compare the effects of market volatilities on Inspire Medical and NTG Nordic 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 NTG Nordic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inspire Medical and NTG Nordic.
Diversification Opportunities for Inspire Medical and NTG Nordic
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Inspire and NTG is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Inspire Medical Systems and NTG Nordic Transport in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NTG Nordic Transport 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 NTG Nordic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NTG Nordic Transport has no effect on the direction of Inspire Medical i.e., Inspire Medical and NTG Nordic go up and down completely randomly.
Pair Corralation between Inspire Medical and NTG Nordic
Assuming the 90 days horizon Inspire Medical Systems is expected to generate 2.04 times more return on investment than NTG Nordic. However, Inspire Medical is 2.04 times more volatile than NTG Nordic Transport. It trades about -0.04 of its potential returns per unit of risk. NTG Nordic Transport is currently generating about -0.37 per unit of risk. If you would invest 17,785 in Inspire Medical Systems on October 24, 2024 and sell it today you would lose (625.00) from holding Inspire Medical Systems or give up 3.51% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Inspire Medical Systems vs. NTG Nordic Transport
Performance |
| Timeline |
| Inspire Medical Systems |
| NTG Nordic Transport |
Inspire Medical and NTG Nordic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Inspire Medical and NTG Nordic
The main advantage of trading using opposite Inspire Medical and NTG Nordic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inspire Medical position performs unexpectedly, NTG Nordic 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 NTG Nordic will offset losses from the drop in NTG Nordic's long position.| Inspire Medical vs. Tsingtao Brewery | Inspire Medical vs. Monster Beverage Corp | Inspire Medical vs. INTER CARS SA | Inspire Medical vs. FUYO GENERAL LEASE |
| NTG Nordic vs. Transport International Holdings | NTG Nordic vs. BII Railway Transportation | NTG Nordic vs. Columbia Sportswear | NTG Nordic vs. American Eagle Outfitters |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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