Correlation Between Insulet and Cytek Biosciences
Can any of the company-specific risk be diversified away by investing in both Insulet and Cytek Biosciences 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 Insulet and Cytek Biosciences into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Insulet and Cytek Biosciences, you can compare the effects of market volatilities on Insulet and Cytek Biosciences 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 Insulet with a short position of Cytek Biosciences. Check out your portfolio center. Please also check ongoing floating volatility patterns of Insulet and Cytek Biosciences.
Diversification Opportunities for Insulet and Cytek Biosciences
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Insulet and Cytek is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Insulet and Cytek Biosciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cytek Biosciences and Insulet 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 Insulet are associated (or correlated) with Cytek Biosciences. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cytek Biosciences has no effect on the direction of Insulet i.e., Insulet and Cytek Biosciences go up and down completely randomly.
Pair Corralation between Insulet and Cytek Biosciences
Given the investment horizon of 90 days Insulet is expected to generate 0.44 times more return on investment than Cytek Biosciences. However, Insulet is 2.25 times less risky than Cytek Biosciences. It trades about 0.14 of its potential returns per unit of risk. Cytek Biosciences is currently generating about 0.04 per unit of risk. If you would invest 18,768 in Insulet on September 3, 2024 and sell it today you would earn a total of 7,910 from holding Insulet or generate 42.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Insulet vs. Cytek Biosciences
Performance |
| Timeline |
| Insulet |
| Cytek Biosciences |
Insulet and Cytek Biosciences Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Insulet and Cytek Biosciences
The main advantage of trading using opposite Insulet and Cytek Biosciences positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Insulet position performs unexpectedly, Cytek Biosciences 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 Cytek Biosciences will offset losses from the drop in Cytek Biosciences' long position.| Insulet vs. DexCom Inc | Insulet vs. Integra LifeSciences Holdings | Insulet vs. Senseonics Holdings | Insulet vs. Edwards Lifesciences Corp |
| Cytek Biosciences vs. Orthopediatrics Corp | Cytek Biosciences vs. Electromed | Cytek Biosciences vs. Pulmonx Corp | Cytek Biosciences vs. Rxsight |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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