Correlation Between Inspire Medical and TYSON FOODS

Can any of the company-specific risk be diversified away by investing in both Inspire Medical and TYSON FOODS 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 Inspire Medical and TYSON FOODS into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Inspire Medical Systems and TYSON FOODS A , you can compare the effects of market volatilities on Inspire Medical and TYSON FOODS 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 Inspire Medical with a short position of TYSON FOODS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inspire Medical and TYSON FOODS.

Diversification Opportunities for Inspire Medical and TYSON FOODS

-0.26

Correlation Coefficient

Inspire Medical  TYSON FOODS

Very good diversification

The 3 months correlation between Inspire and TYSON is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Inspire Medical Systems and TYSON FOODS A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TYSON FOODS A and Inspire 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 Inspire Medical Systems are associated (or correlated) with TYSON FOODS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TYSON FOODS A has no effect on the direction of Inspire Medical i.e., Inspire Medical and TYSON FOODS go up and down completely randomly.

Pair Corralation between Inspire Medical and TYSON FOODS

Assuming the 90 days horizon Inspire Medical Systems is expected to under-perform the TYSON FOODS. In addition to that, Inspire Medical is 2.05 times more volatile than TYSON FOODS A . It trades about -0.1 of its total potential returns per unit of risk. TYSON FOODS A is currently generating about 0.0 per unit of volatility. If you would invest  5,531  in TYSON FOODS A on December 20, 2024 and sell it today you would lose (14.00) from holding TYSON FOODS A or give up 0.25% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.33%
Values	Daily Returns

Inspire Medical Systems  vs.  TYSON FOODS A

Inspire Medical Systems

Risk-Adjusted Performance

Very Weak

Over the last 90 days Inspire Medical Systems has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

TYSON FOODS A

Risk-Adjusted Performance

Very Weak

Over the last 90 days TYSON FOODS A has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, TYSON FOODS is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Inspire Medical and TYSON FOODS

The main advantage of trading using opposite Inspire Medical and TYSON FOODS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inspire Medical position performs unexpectedly, TYSON FOODS 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 TYSON FOODS will offset losses from the drop in TYSON FOODS's long position.

The idea behind Inspire Medical Systems and TYSON FOODS A 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.

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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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.