Correlation Between Inogen and Trinity Biotech
Can any of the company-specific risk be diversified away by investing in both Inogen and Trinity Biotech 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 Trinity Biotech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Inogen Inc and Trinity Biotech plc, you can compare the effects of market volatilities on Inogen and Trinity Biotech 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 Trinity Biotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inogen and Trinity Biotech.
Diversification Opportunities for Inogen and Trinity Biotech
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Inogen and Trinity is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Inogen Inc and Trinity Biotech plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trinity Biotech plc 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 Trinity Biotech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trinity Biotech plc has no effect on the direction of Inogen i.e., Inogen and Trinity Biotech go up and down completely randomly.
Pair Corralation between Inogen and Trinity Biotech
Given the investment horizon of 90 days Inogen Inc is expected to generate 0.64 times more return on investment than Trinity Biotech. However, Inogen Inc is 1.56 times less risky than Trinity Biotech. It trades about 0.0 of its potential returns per unit of risk. Trinity Biotech plc is currently generating about -0.02 per unit of risk. If you would invest 1,266 in Inogen Inc on December 6, 2024 and sell it today you would lose (485.00) from holding Inogen Inc or give up 38.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Inogen Inc vs. Trinity Biotech plc
Performance |
| Timeline |
| Inogen Inc |
| Trinity Biotech plc |
Inogen and Trinity Biotech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Inogen and Trinity Biotech
The main advantage of trading using opposite Inogen and Trinity Biotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inogen position performs unexpectedly, Trinity Biotech 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 Trinity Biotech will offset losses from the drop in Trinity Biotech's long position.The idea behind Inogen Inc and Trinity Biotech plc 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.| Trinity Biotech vs. Star Equity Holdings | Trinity Biotech vs. Standard Biotools | Trinity Biotech vs. Biodesix | Trinity Biotech vs. ENDRA Life Sciences |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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