Correlation Between Inotiv and Fonar
Can any of the company-specific risk be diversified away by investing in both Inotiv and Fonar 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 Inotiv and Fonar into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Inotiv Inc and Fonar, you can compare the effects of market volatilities on Inotiv and Fonar 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 Inotiv with a short position of Fonar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inotiv and Fonar.
Diversification Opportunities for Inotiv and Fonar
Excellent diversification
The 3 months correlation between Inotiv and Fonar is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Inotiv Inc and Fonar in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fonar and Inotiv 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 Inotiv Inc are associated (or correlated) with Fonar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fonar has no effect on the direction of Inotiv i.e., Inotiv and Fonar go up and down completely randomly.
Pair Corralation between Inotiv and Fonar
Given the investment horizon of 90 days Inotiv Inc is expected to generate 3.42 times more return on investment than Fonar. However, Inotiv is 3.42 times more volatile than Fonar. It trades about 0.05 of its potential returns per unit of risk. Fonar is currently generating about -0.02 per unit of risk. If you would invest 260.00 in Inotiv Inc on August 24, 2024 and sell it today you would earn a total of 81.00 from holding Inotiv Inc or generate 31.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Inotiv Inc vs. Fonar
Performance |
| Timeline |
| Inotiv Inc |
| Fonar |
Inotiv and Fonar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Inotiv and Fonar
The main advantage of trading using opposite Inotiv and Fonar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inotiv position performs unexpectedly, Fonar 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 Fonar will offset losses from the drop in Fonar's long position.The idea behind Inotiv Inc and Fonar 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.| Fonar vs. Burning Rock Biotech | Fonar vs. Sera Prognostics | Fonar vs. Exagen Inc | Fonar vs. Castle Biosciences |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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