Correlation Between GlucoTrack and InspireMD

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

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

Diversification Opportunities for GlucoTrack and InspireMD

-0.66

Correlation Coefficient

GlucoTrack  InspireMD

Excellent diversification

The 3 months correlation between GlucoTrack and InspireMD is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding GlucoTrack and InspireMD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on InspireMD and GlucoTrack 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 GlucoTrack are associated (or correlated) with InspireMD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of InspireMD has no effect on the direction of GlucoTrack i.e., GlucoTrack and InspireMD go up and down completely randomly.

Pair Corralation between GlucoTrack and InspireMD

Given the investment horizon of 90 days GlucoTrack is expected to under-perform the InspireMD. In addition to that, GlucoTrack is 5.36 times more volatile than InspireMD. It trades about -0.15 of its total potential returns per unit of risk. InspireMD is currently generating about 0.07 per unit of volatility. If you would invest  246.00  in InspireMD on October 26, 2024 and sell it today you would earn a total of  30.00  from holding InspireMD or generate 12.2% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

GlucoTrack  vs.  InspireMD

GlucoTrack

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GlucoTrack has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in February 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

InspireMD

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in InspireMD are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Even with relatively fragile basic indicators, InspireMD reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with GlucoTrack and InspireMD

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

The idea behind GlucoTrack and InspireMD 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.