Correlation Between EXACT Sciences and Inari Medical
Can any of the company-specific risk be diversified away by investing in both EXACT Sciences and Inari Medical 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 EXACT Sciences and Inari Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EXACT Sciences and Inari Medical, you can compare the effects of market volatilities on EXACT Sciences and Inari Medical 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 EXACT Sciences with a short position of Inari Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of EXACT Sciences and Inari Medical.
Diversification Opportunities for EXACT Sciences and Inari Medical
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between EXACT and Inari is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding EXACT Sciences and Inari Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inari Medical and EXACT Sciences 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 EXACT Sciences are associated (or correlated) with Inari Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inari Medical has no effect on the direction of EXACT Sciences i.e., EXACT Sciences and Inari Medical go up and down completely randomly.
Pair Corralation between EXACT Sciences and Inari Medical
Given the investment horizon of 90 days EXACT Sciences is expected to generate 1.07 times more return on investment than Inari Medical. However, EXACT Sciences is 1.07 times more volatile than Inari Medical. It trades about 0.03 of its potential returns per unit of risk. Inari Medical is currently generating about -0.01 per unit of risk. If you would invest 4,555 in EXACT Sciences on August 24, 2024 and sell it today you would earn a total of 736.00 from holding EXACT Sciences or generate 16.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
EXACT Sciences vs. Inari Medical
Performance |
| Timeline |
| EXACT Sciences |
| Inari Medical |
EXACT Sciences and Inari Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EXACT Sciences and Inari Medical
The main advantage of trading using opposite EXACT Sciences and Inari Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EXACT Sciences position performs unexpectedly, Inari Medical 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 Inari Medical will offset losses from the drop in Inari Medical's long position.| EXACT Sciences vs. Natera Inc | EXACT Sciences vs. Caredx Inc | EXACT Sciences vs. Illumina | EXACT Sciences vs. Twist Bioscience Corp |
| Inari Medical vs. Outset Medical | Inari Medical vs. Legend Biotech Corp | Inari Medical vs. Progyny | Inari Medical vs. Axonics Modulation Technologies |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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