Correlation Between Inogen and Fonar

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

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

Diversification Opportunities for Inogen and Fonar

0.45

Correlation Coefficient

Inogen  Fonar

Very weak diversification

The 3 months correlation between Inogen and Fonar is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Inogen Inc and Fonar in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fonar 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 Fonar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fonar has no effect on the direction of Inogen i.e., Inogen and Fonar go up and down completely randomly.

Pair Corralation between Inogen and Fonar

Given the investment horizon of 90 days Inogen Inc is expected to under-perform the Fonar. In addition to that, Inogen is 1.41 times more volatile than Fonar. It trades about -0.08 of its total potential returns per unit of risk. Fonar is currently generating about -0.09 per unit of volatility. If you would invest  1,755  in Fonar on September 20, 2024 and sell it today you would lose (244.00) from holding Fonar or give up 13.9% of portfolio value over 90 days.

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

Inogen Inc  vs.  Fonar

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 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 January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Fonar

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fonar has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Inogen and Fonar

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

The idea behind Inogen Inc and Fonar 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.