Correlation Between Inogen and Aveanna Healthcare

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

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

Diversification Opportunities for Inogen and Aveanna Healthcare

0.75

Correlation Coefficient

Inogen  Aveanna Healthcare

Poor diversification

The 3 months correlation between Inogen and Aveanna is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Inogen Inc and Aveanna Healthcare Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aveanna Healthcare and Inogen 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 Inogen Inc are associated (or correlated) with Aveanna Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aveanna Healthcare has no effect on the direction of Inogen i.e., Inogen and Aveanna Healthcare go up and down completely randomly.

Pair Corralation between Inogen and Aveanna Healthcare

Given the investment horizon of 90 days Inogen Inc is expected to under-perform the Aveanna Healthcare. But the stock apears to be less risky and, when comparing its historical volatility, Inogen Inc is 1.13 times less risky than Aveanna Healthcare. The stock trades about -0.02 of its potential returns per unit of risk. The Aveanna Healthcare Holdings is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  96.00  in Aveanna Healthcare Holdings on September 30, 2024 and sell it today you would earn a total of  370.00  from holding Aveanna Healthcare Holdings or generate 385.42% return on investment over 90 days.

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

Inogen Inc  vs.  Aveanna Healthcare Holdings

Inogen Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Inogen Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest inconsistent performance, the Stock's technical and fundamental indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Aveanna Healthcare

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aveanna Healthcare Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest inconsistent performance, the Stock's basic indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Pair Trading with Inogen and Aveanna Healthcare

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

The idea behind Inogen Inc and Aveanna Healthcare Holdings 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.