Correlation Between Inari Medical and Beyond Air
Can any of the company-specific risk be diversified away by investing in both Inari Medical and Beyond Air 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 Beyond Air into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Inari Medical and Beyond Air, you can compare the effects of market volatilities on Inari Medical and Beyond Air 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 Beyond Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inari Medical and Beyond Air.
Diversification Opportunities for Inari Medical and Beyond Air
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Inari and Beyond is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Inari Medical and Beyond Air in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beyond Air 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 Beyond Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beyond Air has no effect on the direction of Inari Medical i.e., Inari Medical and Beyond Air go up and down completely randomly.
Pair Corralation between Inari Medical and Beyond Air
Given the investment horizon of 90 days Inari Medical is expected to generate 2.86 times less return on investment than Beyond Air. But when comparing it to its historical volatility, Inari Medical is 1.67 times less risky than Beyond Air. It trades about 0.15 of its potential returns per unit of risk. Beyond Air is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 37.00 in Beyond Air on August 24, 2024 and sell it today you would earn a total of 15.00 from holding Beyond Air or generate 40.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Inari Medical vs. Beyond Air
Performance |
| Timeline |
| Inari Medical |
| Beyond Air |
Inari Medical and Beyond Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Inari Medical and Beyond Air
The main advantage of trading using opposite Inari Medical and Beyond Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inari Medical position performs unexpectedly, Beyond Air 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 Beyond Air will offset losses from the drop in Beyond Air's long position.| Inari Medical vs. Outset Medical | Inari Medical vs. Legend Biotech Corp | Inari Medical vs. Progyny | Inari Medical vs. Axonics Modulation Technologies |
| Beyond Air vs. Lucid Diagnostics | Beyond Air vs. Inari Medical | Beyond Air vs. Clearpoint Neuro | Beyond Air vs. Avita Medical |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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