Correlation Between Inogen and Tandem Diabetes

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

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

Diversification Opportunities for Inogen and Tandem Diabetes

-0.19

Correlation Coefficient

Inogen  Tandem Diabetes

Good diversification

The 3 months correlation between Inogen and Tandem is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Inogen Inc and Tandem Diabetes Care in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tandem Diabetes Care 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 Tandem Diabetes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tandem Diabetes Care has no effect on the direction of Inogen i.e., Inogen and Tandem Diabetes go up and down completely randomly.

Pair Corralation between Inogen and Tandem Diabetes

Given the investment horizon of 90 days Inogen Inc is expected to generate 0.96 times more return on investment than Tandem Diabetes. However, Inogen Inc is 1.04 times less risky than Tandem Diabetes. It trades about -0.04 of its potential returns per unit of risk. Tandem Diabetes Care is currently generating about -0.04 per unit of risk. If you would invest  1,247  in Inogen Inc on October 20, 2024 and sell it today you would lose (200.00) from holding Inogen Inc or give up 16.04% of portfolio value over 90 days.

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

Inogen Inc  vs.  Tandem Diabetes Care

Inogen Inc

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Inogen Inc are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady technical and fundamental indicators, Inogen displayed solid returns over the last few months and may actually be approaching a breakup point.

Tandem Diabetes Care

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Tandem Diabetes Care are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating fundamental indicators, Tandem Diabetes may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Inogen and Tandem Diabetes

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

The idea behind Inogen Inc and Tandem Diabetes Care 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..