Correlation Between Paragon 28 and Inogen

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Can any of the company-specific risk be diversified away by investing in both Paragon 28 and Inogen 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 Paragon 28 and Inogen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Paragon 28 and Inogen Inc, you can compare the effects of market volatilities on Paragon 28 and Inogen 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 Paragon 28 with a short position of Inogen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Paragon 28 and Inogen.

Diversification Opportunities for Paragon 28 and Inogen

0.36
  Correlation Coefficient

Weak diversification

The 3 months correlation between Paragon and Inogen is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Paragon 28 and Inogen Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inogen Inc and Paragon 28 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 Paragon 28 are associated (or correlated) with Inogen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inogen Inc has no effect on the direction of Paragon 28 i.e., Paragon 28 and Inogen go up and down completely randomly.

Pair Corralation between Paragon 28 and Inogen

Considering the 90-day investment horizon Paragon 28 is expected to under-perform the Inogen. But the stock apears to be less risky and, when comparing its historical volatility, Paragon 28 is 1.05 times less risky than Inogen. The stock trades about -0.01 of its potential returns per unit of risk. The Inogen Inc is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  1,068  in Inogen Inc on August 31, 2024 and sell it today you would lose (97.00) from holding Inogen Inc or give up 9.08% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Paragon 28  vs.  Inogen Inc

 Performance 
       Timeline  
Paragon 28 

Risk-Adjusted Performance

6 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in Paragon 28 are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, Paragon 28 sustained solid returns over the last few months and may actually be approaching a breakup point.
Inogen Inc 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Inogen Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's technical and fundamental indicators remain very healthy which may send shares a bit higher in December 2024. The recent disarray may also be a sign of long period up-swing for the firm investors.

Paragon 28 and Inogen Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Paragon 28 and Inogen

The main advantage of trading using opposite Paragon 28 and Inogen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Paragon 28 position performs unexpectedly, Inogen 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 Inogen will offset losses from the drop in Inogen's long position.
The idea behind Paragon 28 and Inogen Inc 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.
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.

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