Correlation Between Inogen and Orthopediatrics Corp

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

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

Diversification Opportunities for Inogen and Orthopediatrics Corp

0.68

Correlation Coefficient

Inogen  Orthopediatrics Corp

Poor diversification

The 3 months correlation between Inogen and Orthopediatrics is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Inogen Inc and Orthopediatrics Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orthopediatrics Corp 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 Orthopediatrics Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Orthopediatrics Corp has no effect on the direction of Inogen i.e., Inogen and Orthopediatrics Corp go up and down completely randomly.

Pair Corralation between Inogen and Orthopediatrics Corp

Given the investment horizon of 90 days Inogen Inc is expected to under-perform the Orthopediatrics Corp. But the stock apears to be less risky and, when comparing its historical volatility, Inogen Inc is 1.06 times less risky than Orthopediatrics Corp. The stock trades about -0.08 of its potential returns per unit of risk. The Orthopediatrics Corp is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest  3,050  in Orthopediatrics Corp on September 1, 2024 and sell it today you would lose (452.00) from holding Orthopediatrics Corp or give up 14.82% of portfolio value over 90 days.

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

Inogen Inc  vs.  Orthopediatrics Corp

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 December 2024. The recent disarray may also be a sign of long period up-swing for the firm investors.

Orthopediatrics Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Orthopediatrics Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's fundamental indicators remain comparatively stable which may send shares a bit higher in December 2024. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Inogen and Orthopediatrics Corp

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

The idea behind Inogen Inc and Orthopediatrics Corp 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.