Correlation Between Inogen and CareCloud
Can any of the company-specific risk be diversified away by investing in both Inogen and CareCloud 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 Inogen and CareCloud into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Inogen Inc and CareCloud, you can compare the effects of market volatilities on Inogen and CareCloud 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 Inogen with a short position of CareCloud. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inogen and CareCloud.
Diversification Opportunities for Inogen and CareCloud
Average diversification
The 3 months correlation between Inogen and CareCloud is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Inogen Inc and CareCloud in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CareCloud and Inogen 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 Inogen Inc are associated (or correlated) with CareCloud. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CareCloud has no effect on the direction of Inogen i.e., Inogen and CareCloud go up and down completely randomly.
Pair Corralation between Inogen and CareCloud
Given the investment horizon of 90 days Inogen Inc is expected to under-perform the CareCloud. But the stock apears to be less risky and, when comparing its historical volatility, Inogen Inc is 3.7 times less risky than CareCloud. The stock trades about -0.07 of its potential returns per unit of risk. The CareCloud is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 279.00 in CareCloud on September 19, 2024 and sell it today you would earn a total of 72.00 from holding CareCloud or generate 25.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Inogen Inc vs. CareCloud
Performance |
| Timeline |
| Inogen Inc |
| CareCloud |
Inogen and CareCloud Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Inogen and CareCloud
The main advantage of trading using opposite Inogen and CareCloud positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inogen position performs unexpectedly, CareCloud 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 CareCloud will offset losses from the drop in CareCloud's long position.The idea behind Inogen Inc and CareCloud 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.| CareCloud vs. Forian Inc | CareCloud vs. HealthStream | CareCloud vs. National Research Corp | CareCloud vs. Streamline Health Solutions |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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