Correlation Between Inspira Technologies and Helius Medical

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

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

Diversification Opportunities for Inspira Technologies and Helius Medical

-0.32

Correlation Coefficient

Inspira Technologies  Helius Medical

Very good diversification

The 3 months correlation between Inspira and Helius is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Inspira Technologies Oxy and Helius Medical Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Helius Medical Techn and Inspira Technologies 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 Inspira Technologies Oxy are associated (or correlated) with Helius Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Helius Medical Techn has no effect on the direction of Inspira Technologies i.e., Inspira Technologies and Helius Medical go up and down completely randomly.

Pair Corralation between Inspira Technologies and Helius Medical

Assuming the 90 days horizon Inspira Technologies Oxy is expected to under-perform the Helius Medical. But the stock apears to be less risky and, when comparing its historical volatility, Inspira Technologies Oxy is 1.68 times less risky than Helius Medical. The stock trades about -0.1 of its potential returns per unit of risk. The Helius Medical Technologies is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  66.00  in Helius Medical Technologies on October 4, 2024 and sell it today you would earn a total of  1.00  from holding Helius Medical Technologies or generate 1.52% return on investment over 90 days.

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

Inspira Technologies Oxy  vs.  Helius Medical Technologies

Inspira Technologies Oxy

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Inspira Technologies Oxy are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Inspira Technologies showed solid returns over the last few months and may actually be approaching a breakup point.

Helius Medical Techn

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Helius Medical Technologies are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak fundamental indicators, Helius Medical unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Inspira Technologies and Helius Medical

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

The idea behind Inspira Technologies Oxy and Helius Medical Technologies 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.