Correlation Between Burning Rock and Inspira Technologies

Can any of the company-specific risk be diversified away by investing in both Burning Rock and Inspira Technologies 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 Burning Rock and Inspira Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Burning Rock Biotech and Inspira Technologies Oxy, you can compare the effects of market volatilities on Burning Rock and Inspira Technologies 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 Burning Rock with a short position of Inspira Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Burning Rock and Inspira Technologies.

Diversification Opportunities for Burning Rock and Inspira Technologies

-0.69

Correlation Coefficient

Burning Rock  Inspira Technologies

Excellent diversification

The 3 months correlation between Burning and Inspira is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Burning Rock Biotech and Inspira Technologies Oxy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inspira Technologies Oxy and Burning Rock 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 Burning Rock Biotech are associated (or correlated) with Inspira Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inspira Technologies Oxy has no effect on the direction of Burning Rock i.e., Burning Rock and Inspira Technologies go up and down completely randomly.

Pair Corralation between Burning Rock and Inspira Technologies

Considering the 90-day investment horizon Burning Rock Biotech is expected to under-perform the Inspira Technologies. In addition to that, Burning Rock is 1.1 times more volatile than Inspira Technologies Oxy. It trades about -0.03 of its total potential returns per unit of risk. Inspira Technologies Oxy is currently generating about 0.0 per unit of volatility. If you would invest  165.00  in Inspira Technologies Oxy on October 5, 2024 and sell it today you would lose (60.00) from holding Inspira Technologies Oxy or give up 36.36% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	99.79%
Values	Daily Returns

Burning Rock Biotech  vs.  Inspira Technologies Oxy

Burning Rock Biotech

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Burning Rock Biotech are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Burning Rock reported solid returns over the last few months and may actually be approaching a breakup point.

Inspira Technologies Oxy

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Inspira Technologies Oxy has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Burning Rock and Inspira Technologies

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

The idea behind Burning Rock Biotech and Inspira Technologies Oxy 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .