Correlation Between Integra LifeSciences and Insulet
Can any of the company-specific risk be diversified away by investing in both Integra LifeSciences and Insulet 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 Integra LifeSciences and Insulet into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Integra LifeSciences Holdings and Insulet, you can compare the effects of market volatilities on Integra LifeSciences and Insulet 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 Integra LifeSciences with a short position of Insulet. Check out your portfolio center. Please also check ongoing floating volatility patterns of Integra LifeSciences and Insulet.
Diversification Opportunities for Integra LifeSciences and Insulet
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Integra and Insulet is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Integra LifeSciences Holdings and Insulet in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Insulet and Integra LifeSciences 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 Integra LifeSciences Holdings are associated (or correlated) with Insulet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Insulet has no effect on the direction of Integra LifeSciences i.e., Integra LifeSciences and Insulet go up and down completely randomly.
Pair Corralation between Integra LifeSciences and Insulet
Given the investment horizon of 90 days Integra LifeSciences is expected to generate 1.24 times less return on investment than Insulet. In addition to that, Integra LifeSciences is 2.35 times more volatile than Insulet. It trades about 0.09 of its total potential returns per unit of risk. Insulet is currently generating about 0.25 per unit of volatility. If you would invest 20,442 in Insulet on August 28, 2024 and sell it today you would earn a total of 6,216 from holding Insulet or generate 30.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Integra LifeSciences Holdings vs. Insulet
Performance |
| Timeline |
| Integra LifeSciences |
| Insulet |
Integra LifeSciences and Insulet Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Integra LifeSciences and Insulet
The main advantage of trading using opposite Integra LifeSciences and Insulet positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Integra LifeSciences position performs unexpectedly, Insulet 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 Insulet will offset losses from the drop in Insulet's long position.| Integra LifeSciences vs. ICU Medical | Integra LifeSciences vs. CONMED | Integra LifeSciences vs. Haemonetics | Integra LifeSciences vs. Merit Medical Systems |
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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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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