Correlation Between Genertec Universal and Inspire Medical

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

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

Diversification Opportunities for Genertec Universal and Inspire Medical

0.09

Correlation Coefficient

Genertec Universal  Inspire Medical

Significant diversification

The 3 months correlation between Genertec and Inspire is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Genertec Universal Medical and Inspire Medical Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inspire Medical Systems and Genertec Universal 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 Genertec Universal Medical are associated (or correlated) with Inspire Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inspire Medical Systems has no effect on the direction of Genertec Universal i.e., Genertec Universal and Inspire Medical go up and down completely randomly.

Pair Corralation between Genertec Universal and Inspire Medical

Assuming the 90 days horizon Genertec Universal Medical is expected to generate 0.79 times more return on investment than Inspire Medical. However, Genertec Universal Medical is 1.26 times less risky than Inspire Medical. It trades about 0.02 of its potential returns per unit of risk. Inspire Medical Systems is currently generating about 0.0 per unit of risk. If you would invest  55.00  in Genertec Universal Medical on October 24, 2024 and sell it today you would earn a total of  3.00  from holding Genertec Universal Medical or generate 5.45% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	99.8%
Values	Daily Returns

Genertec Universal Medical  vs.  Inspire Medical Systems

Genertec Universal

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Genertec Universal Medical are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Genertec Universal may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Inspire Medical Systems

Risk-Adjusted Performance

0 of 100

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 nearly stable basic indicators, Inspire Medical is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Genertec Universal and Inspire Medical

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

The idea behind Genertec Universal Medical and Inspire Medical Systems 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.

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 Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.