Correlation Between EDAP TMS and Inspira Technologies
Can any of the company-specific risk be diversified away by investing in both EDAP TMS 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 EDAP TMS and Inspira Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EDAP TMS SA and Inspira Technologies Oxy, you can compare the effects of market volatilities on EDAP TMS 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 EDAP TMS with a short position of Inspira Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of EDAP TMS and Inspira Technologies.
Diversification Opportunities for EDAP TMS and Inspira Technologies
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between EDAP and Inspira is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding EDAP TMS SA 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 EDAP TMS 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 EDAP TMS SA 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 EDAP TMS i.e., EDAP TMS and Inspira Technologies go up and down completely randomly.
Pair Corralation between EDAP TMS and Inspira Technologies
Given the investment horizon of 90 days EDAP TMS SA is expected to generate 0.98 times more return on investment than Inspira Technologies. However, EDAP TMS SA is 1.02 times less risky than Inspira Technologies. It trades about 0.06 of its potential returns per unit of risk. Inspira Technologies Oxy is currently generating about -0.08 per unit of risk. If you would invest 240.00 in EDAP TMS SA on December 2, 2024 and sell it today you would earn a total of 16.00 from holding EDAP TMS SA or generate 6.67% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
EDAP TMS SA vs. Inspira Technologies Oxy
Performance |
Timeline |
EDAP TMS SA |
Inspira Technologies Oxy |
EDAP TMS and Inspira Technologies Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with EDAP TMS and Inspira Technologies
The main advantage of trading using opposite EDAP TMS and Inspira Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EDAP TMS 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.EDAP TMS vs. Patterson Companies | EDAP TMS vs. Henry Schein | EDAP TMS vs. McKesson | EDAP TMS vs. Cardinal Health |
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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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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