Correlation Between Inari Medical and BlueLinx Holdings
Can any of the company-specific risk be diversified away by investing in both Inari Medical and BlueLinx Holdings 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 Inari Medical and BlueLinx Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Inari Medical and BlueLinx Holdings, you can compare the effects of market volatilities on Inari Medical and BlueLinx Holdings 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 Inari Medical with a short position of BlueLinx Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inari Medical and BlueLinx Holdings.
Diversification Opportunities for Inari Medical and BlueLinx Holdings
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Inari and BlueLinx is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Inari Medical and BlueLinx Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BlueLinx Holdings and Inari 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 Inari Medical are associated (or correlated) with BlueLinx Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BlueLinx Holdings has no effect on the direction of Inari Medical i.e., Inari Medical and BlueLinx Holdings go up and down completely randomly.
Pair Corralation between Inari Medical and BlueLinx Holdings
Given the investment horizon of 90 days Inari Medical is expected to generate 3.67 times more return on investment than BlueLinx Holdings. However, Inari Medical is 3.67 times more volatile than BlueLinx Holdings. It trades about 0.29 of its potential returns per unit of risk. BlueLinx Holdings is currently generating about 0.11 per unit of risk. If you would invest 5,324 in Inari Medical on October 23, 2024 and sell it today you would earn a total of 2,631 from holding Inari Medical or generate 49.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.74% |
| Values | Daily Returns |
Inari Medical vs. BlueLinx Holdings
Performance |
| Timeline |
| Inari Medical |
| BlueLinx Holdings |
Inari Medical and BlueLinx Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Inari Medical and BlueLinx Holdings
The main advantage of trading using opposite Inari Medical and BlueLinx Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inari Medical position performs unexpectedly, BlueLinx Holdings 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 BlueLinx Holdings will offset losses from the drop in BlueLinx Holdings' long position.The idea behind Inari Medical and BlueLinx Holdings 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.| BlueLinx Holdings vs. DXP Enterprises | BlueLinx Holdings vs. Distribution Solutions Group | BlueLinx Holdings vs. Core Main | BlueLinx Holdings vs. WESCO International |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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