Correlation Between Insulet and Catheter Precision
Can any of the company-specific risk be diversified away by investing in both Insulet and Catheter Precision 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 Catheter Precision into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Insulet and Catheter Precision, you can compare the effects of market volatilities on Insulet and Catheter Precision 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 Catheter Precision. Check out your portfolio center. Please also check ongoing floating volatility patterns of Insulet and Catheter Precision.
Diversification Opportunities for Insulet and Catheter Precision
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Insulet and Catheter is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Insulet and Catheter Precision in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catheter Precision 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 Catheter Precision. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catheter Precision has no effect on the direction of Insulet i.e., Insulet and Catheter Precision go up and down completely randomly.
Pair Corralation between Insulet and Catheter Precision
Given the investment horizon of 90 days Insulet is expected to generate 0.28 times more return on investment than Catheter Precision. However, Insulet is 3.6 times less risky than Catheter Precision. It trades about 0.01 of its potential returns per unit of risk. Catheter Precision is currently generating about -0.05 per unit of risk. If you would invest 28,409 in Insulet on September 4, 2024 and sell it today you would lose (1,760) from holding Insulet or give up 6.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Insulet vs. Catheter Precision
Performance |
| Timeline |
| Insulet |
| Catheter Precision |
Insulet and Catheter Precision Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Insulet and Catheter Precision
The main advantage of trading using opposite Insulet and Catheter Precision positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Insulet position performs unexpectedly, Catheter Precision 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 Catheter Precision will offset losses from the drop in Catheter Precision's long position.| Insulet vs. DexCom Inc | Insulet vs. Integra LifeSciences Holdings | Insulet vs. Senseonics Holdings | Insulet vs. Edwards Lifesciences Corp |
| Catheter Precision vs. Corporacion America Airports | Catheter Precision vs. Air Lease | Catheter Precision vs. AerSale Corp | Catheter Precision vs. Kaiser Aluminum |
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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