Correlation Between Laboratory and Inogen

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

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

Diversification Opportunities for Laboratory and Inogen

0.5

Correlation Coefficient

Laboratory  Inogen

Very weak diversification

The 3 months correlation between Laboratory and Inogen is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Laboratory of and Inogen Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inogen Inc and Laboratory 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 Laboratory of are associated (or correlated) with Inogen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inogen Inc has no effect on the direction of Laboratory i.e., Laboratory and Inogen go up and down completely randomly.

Pair Corralation between Laboratory and Inogen

Allowing for the 90-day total investment horizon Laboratory of is expected to generate 0.27 times more return on investment than Inogen. However, Laboratory of is 3.69 times less risky than Inogen. It trades about 0.02 of its potential returns per unit of risk. Inogen Inc is currently generating about -0.02 per unit of risk. If you would invest  21,118  in Laboratory of on October 3, 2024 and sell it today you would earn a total of  1,814  from holding Laboratory of or generate 8.59% return on investment over 90 days.

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

Laboratory of  vs.  Inogen Inc

Laboratory

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Laboratory of are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak technical indicators, Laboratory may actually be approaching a critical reversion point that can send shares even higher in February 2025.

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 very healthy technical and fundamental indicators, Inogen is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Laboratory and Inogen

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

The idea behind Laboratory of and Inogen Inc 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.