Correlation Between Inogen and IDEXX Laboratories
Can any of the company-specific risk be diversified away by investing in both Inogen and IDEXX Laboratories 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 IDEXX Laboratories into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Inogen Inc and IDEXX Laboratories, you can compare the effects of market volatilities on Inogen and IDEXX Laboratories 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 IDEXX Laboratories. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inogen and IDEXX Laboratories.
Diversification Opportunities for Inogen and IDEXX Laboratories
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Inogen and IDEXX is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Inogen Inc and IDEXX Laboratories in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IDEXX Laboratories 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 IDEXX Laboratories. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IDEXX Laboratories has no effect on the direction of Inogen i.e., Inogen and IDEXX Laboratories go up and down completely randomly.
Pair Corralation between Inogen and IDEXX Laboratories
Given the investment horizon of 90 days Inogen Inc is expected to under-perform the IDEXX Laboratories. In addition to that, Inogen is 1.83 times more volatile than IDEXX Laboratories. It trades about -0.08 of its total potential returns per unit of risk. IDEXX Laboratories is currently generating about 0.02 per unit of volatility. If you would invest 42,916 in IDEXX Laboratories on December 5, 2024 and sell it today you would earn a total of 219.50 from holding IDEXX Laboratories or generate 0.51% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 97.5% |
Values | Daily Returns |
Inogen Inc vs. IDEXX Laboratories
Performance |
Timeline |
Inogen Inc |
IDEXX Laboratories |
Inogen and IDEXX Laboratories Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Inogen and IDEXX Laboratories
The main advantage of trading using opposite Inogen and IDEXX Laboratories positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inogen position performs unexpectedly, IDEXX Laboratories 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 IDEXX Laboratories will offset losses from the drop in IDEXX Laboratories' long position.The idea behind Inogen Inc and IDEXX Laboratories 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.IDEXX Laboratories vs. Waters | IDEXX Laboratories vs. IQVIA Holdings | IDEXX Laboratories vs. Charles River Laboratories | IDEXX Laboratories vs. Revvity |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
Other Complementary Tools
Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
Global Correlations Find global opportunities by holding instruments from different markets | |
ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope |