Correlation Between Inspire Medical and SINGAPORE AIRLINES
Can any of the company-specific risk be diversified away by investing in both Inspire Medical and SINGAPORE AIRLINES 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 SINGAPORE AIRLINES 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 SINGAPORE AIRLINES, you can compare the effects of market volatilities on Inspire Medical and SINGAPORE AIRLINES 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 SINGAPORE AIRLINES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inspire Medical and SINGAPORE AIRLINES.
Diversification Opportunities for Inspire Medical and SINGAPORE AIRLINES
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Inspire and SINGAPORE is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Inspire Medical Systems and SINGAPORE AIRLINES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SINGAPORE AIRLINES 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 SINGAPORE AIRLINES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SINGAPORE AIRLINES has no effect on the direction of Inspire Medical i.e., Inspire Medical and SINGAPORE AIRLINES go up and down completely randomly.
Pair Corralation between Inspire Medical and SINGAPORE AIRLINES
Assuming the 90 days horizon Inspire Medical Systems is expected to generate 2.09 times more return on investment than SINGAPORE AIRLINES. However, Inspire Medical is 2.09 times more volatile than SINGAPORE AIRLINES. It trades about 0.06 of its potential returns per unit of risk. SINGAPORE AIRLINES is currently generating about 0.05 per unit of risk. If you would invest 18,945 in Inspire Medical Systems on October 12, 2024 and sell it today you would earn a total of 1,385 from holding Inspire Medical Systems or generate 7.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Inspire Medical Systems vs. SINGAPORE AIRLINES
Performance |
| Timeline |
| Inspire Medical Systems |
| SINGAPORE AIRLINES |
Inspire Medical and SINGAPORE AIRLINES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Inspire Medical and SINGAPORE AIRLINES
The main advantage of trading using opposite Inspire Medical and SINGAPORE AIRLINES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inspire Medical position performs unexpectedly, SINGAPORE AIRLINES 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 SINGAPORE AIRLINES will offset losses from the drop in SINGAPORE AIRLINES's long position.| Inspire Medical vs. REMEDY ENTERTAINMENT OYJ | Inspire Medical vs. PARKEN Sport Entertainment | Inspire Medical vs. AM EAGLE OUTFITTERS | Inspire Medical vs. Tencent Music Entertainment |
| SINGAPORE AIRLINES vs. OBSERVE MEDICAL ASA | SINGAPORE AIRLINES vs. IMAGIN MEDICAL INC | SINGAPORE AIRLINES vs. PULSION Medical Systems | SINGAPORE AIRLINES vs. Inspire Medical Systems |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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