Correlation Between Inspire Medical and Outset Medical
Can any of the company-specific risk be diversified away by investing in both Inspire Medical and Outset 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 Inspire Medical and Outset Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Inspire Medical Systems and Outset Medical, you can compare the effects of market volatilities on Inspire Medical and Outset 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 Inspire Medical with a short position of Outset Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inspire Medical and Outset Medical.
Diversification Opportunities for Inspire Medical and Outset Medical
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Inspire and Outset is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Inspire Medical Systems and Outset Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Outset Medical and Inspire Medical 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 Inspire Medical Systems are associated (or correlated) with Outset Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Outset Medical has no effect on the direction of Inspire Medical i.e., Inspire Medical and Outset Medical go up and down completely randomly.
Pair Corralation between Inspire Medical and Outset Medical
Given the investment horizon of 90 days Inspire Medical Systems is expected to generate 0.56 times more return on investment than Outset Medical. However, Inspire Medical Systems is 1.79 times less risky than Outset Medical. It trades about 0.01 of its potential returns per unit of risk. Outset Medical is currently generating about -0.05 per unit of risk. If you would invest 22,952 in Inspire Medical Systems on August 28, 2024 and sell it today you would lose (3,020) from holding Inspire Medical Systems or give up 13.16% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Inspire Medical Systems vs. Outset Medical
Performance |
| Timeline |
| Inspire Medical Systems |
| Outset Medical |
Inspire Medical and Outset Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Inspire Medical and Outset Medical
The main advantage of trading using opposite Inspire Medical and Outset Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inspire Medical position performs unexpectedly, Outset 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 Outset Medical will offset losses from the drop in Outset Medical's long position.| Inspire Medical vs. TransMedics Group | Inspire Medical vs. Inari Medical | Inspire Medical vs. InMode | Inspire Medical vs. Insulet |
| Outset Medical vs. Inari Medical | Outset Medical vs. Clearpoint Neuro | Outset Medical vs. Inspire Medical Systems | Outset Medical vs. Nevro Corp |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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