Correlation Between Inari Medical and Exro Technologies
Can any of the company-specific risk be diversified away by investing in both Inari Medical and Exro Technologies 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 Exro Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Inari Medical and Exro Technologies, you can compare the effects of market volatilities on Inari Medical and Exro Technologies 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 Exro Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inari Medical and Exro Technologies.
Diversification Opportunities for Inari Medical and Exro Technologies
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Inari and Exro is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Inari Medical and Exro Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Exro Technologies 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 Exro Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Exro Technologies has no effect on the direction of Inari Medical i.e., Inari Medical and Exro Technologies go up and down completely randomly.
Pair Corralation between Inari Medical and Exro Technologies
Given the investment horizon of 90 days Inari Medical is expected to generate 2.84 times more return on investment than Exro Technologies. However, Inari Medical is 2.84 times more volatile than Exro Technologies. It trades about 0.29 of its potential returns per unit of risk. Exro Technologies is currently generating about -0.38 per unit of risk. If you would invest 5,180 in Inari Medical on November 3, 2024 and sell it today you would earn a total of 2,787 from holding Inari Medical or generate 53.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Inari Medical vs. Exro Technologies
Performance |
| Timeline |
| Inari Medical |
| Exro Technologies |
Inari Medical and Exro Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Inari Medical and Exro Technologies
The main advantage of trading using opposite Inari Medical and Exro Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inari Medical position performs unexpectedly, Exro Technologies 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 Exro Technologies will offset losses from the drop in Exro Technologies' long position.The idea behind Inari Medical and Exro Technologies 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.| Exro Technologies vs. Novonix Ltd ADR | Exro Technologies vs. Magnis Energy Technologies | Exro Technologies vs. Ilika plc | Exro Technologies vs. FuelPositive 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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