Correlation Between MultiPlan and InspireMD

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

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

Diversification Opportunities for MultiPlan and InspireMD

-0.13

Correlation Coefficient

MultiPlan  InspireMD

Good diversification

The 3 months correlation between MultiPlan and InspireMD is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding MultiPlan and InspireMD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on InspireMD and MultiPlan 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 MultiPlan are associated (or correlated) with InspireMD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of InspireMD has no effect on the direction of MultiPlan i.e., MultiPlan and InspireMD go up and down completely randomly.

Pair Corralation between MultiPlan and InspireMD

Given the investment horizon of 90 days MultiPlan is expected to generate 4.51 times more return on investment than InspireMD. However, MultiPlan is 4.51 times more volatile than InspireMD. It trades about 0.1 of its potential returns per unit of risk. InspireMD is currently generating about 0.07 per unit of risk. If you would invest  1,021  in MultiPlan on October 26, 2024 and sell it today you would earn a total of  561.00  from holding MultiPlan or generate 54.95% return on investment over 90 days.

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

MultiPlan  vs.  InspireMD

MultiPlan

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in MultiPlan are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating essential indicators, MultiPlan displayed solid returns over the last few months and may actually be approaching a breakup point.

InspireMD

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in InspireMD are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Even with relatively fragile basic indicators, InspireMD reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with MultiPlan and InspireMD

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

The idea behind MultiPlan and InspireMD 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.

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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.