Correlation Between Masimo and Inspire Medical
Can any of the company-specific risk be diversified away by investing in both Masimo and Inspire 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 Masimo and Inspire Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Masimo and Inspire Medical Systems, you can compare the effects of market volatilities on Masimo and Inspire 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 Masimo with a short position of Inspire Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Masimo and Inspire Medical.
Diversification Opportunities for Masimo and Inspire Medical
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Masimo and Inspire is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Masimo and Inspire Medical Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inspire Medical Systems and Masimo 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 Masimo are associated (or correlated) with Inspire Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inspire Medical Systems has no effect on the direction of Masimo i.e., Masimo and Inspire Medical go up and down completely randomly.
Pair Corralation between Masimo and Inspire Medical
Given the investment horizon of 90 days Masimo is expected to generate 0.79 times more return on investment than Inspire Medical. However, Masimo is 1.27 times less risky than Inspire Medical. It trades about 0.26 of its potential returns per unit of risk. Inspire Medical Systems is currently generating about 0.06 per unit of risk. If you would invest 11,638 in Masimo on August 28, 2024 and sell it today you would earn a total of 5,588 from holding Masimo or generate 48.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Masimo vs. Inspire Medical Systems
Performance |
| Timeline |
| Masimo |
| Inspire Medical Systems |
Masimo and Inspire Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Masimo and Inspire Medical
The main advantage of trading using opposite Masimo and Inspire Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Masimo position performs unexpectedly, Inspire 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 Inspire Medical will offset losses from the drop in Inspire Medical's long position.The idea behind Masimo and Inspire Medical Systems 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.| Inspire Medical vs. TransMedics Group | Inspire Medical vs. Inari Medical | Inspire Medical vs. InMode | Inspire Medical vs. Insulet |
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 Stocks Directory module to find actively traded stocks across global markets.
Other Complementary Tools
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities |