Correlation Between Figs and Inari Medical
Can any of the company-specific risk be diversified away by investing in both Figs 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 Figs and Inari Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Figs Inc and Inari Medical, you can compare the effects of market volatilities on Figs 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 Figs with a short position of Inari Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Figs and Inari Medical.
Diversification Opportunities for Figs and Inari Medical
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Figs and Inari is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Figs Inc and Inari Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inari Medical and Figs 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 Figs Inc 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 Figs i.e., Figs and Inari Medical go up and down completely randomly.
Pair Corralation between Figs and Inari Medical
Given the investment horizon of 90 days Figs Inc is expected to under-perform the Inari Medical. In addition to that, Figs is 1.22 times more volatile than Inari Medical. It trades about -0.01 of its total potential returns per unit of risk. Inari Medical is currently generating about -0.01 per unit of volatility. If you would invest 7,111 in Inari Medical on August 24, 2024 and sell it today you would lose (2,145) from holding Inari Medical or give up 30.16% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Figs Inc vs. Inari Medical
Performance |
| Timeline |
| Figs Inc |
| Inari Medical |
Figs and Inari Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Figs and Inari Medical
The main advantage of trading using opposite Figs and Inari Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Figs 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.The idea behind Figs Inc and Inari Medical pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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