Correlation Between Inogen and Electromed

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

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

Diversification Opportunities for Inogen and Electromed

0.94

Correlation Coefficient

Inogen  Electromed

Almost no diversification

The 3 months correlation between Inogen and Electromed is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Inogen Inc and Electromed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Electromed 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 Electromed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Electromed has no effect on the direction of Inogen i.e., Inogen and Electromed go up and down completely randomly.

Pair Corralation between Inogen and Electromed

Given the investment horizon of 90 days Inogen Inc is expected to under-perform the Electromed. In addition to that, Inogen is 1.12 times more volatile than Electromed. It trades about -0.11 of its total potential returns per unit of risk. Electromed is currently generating about -0.11 per unit of volatility. If you would invest  3,016  in Electromed on December 30, 2024 and sell it today you would lose (682.00) from holding Electromed or give up 22.61% of portfolio value over 90 days.

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

Inogen Inc  vs.  Electromed

Inogen Inc

Risk-Adjusted Performance

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 unsteady performance in the last few months, the Stock's technical and fundamental indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Electromed

Risk-Adjusted Performance

Very Weak

Over the last 90 days Electromed has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's primary indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Inogen and Electromed

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

The idea behind Inogen Inc and Electromed 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.