Correlation Between InspireMD and Bone Biologics

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

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

Diversification Opportunities for InspireMD and Bone Biologics

-0.35

Correlation Coefficient

InspireMD  Bone Biologics

Very good diversification

The 3 months correlation between InspireMD and Bone is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding InspireMD and Bone Biologics Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bone Biologics Corp and InspireMD 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 InspireMD are associated (or correlated) with Bone Biologics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bone Biologics Corp has no effect on the direction of InspireMD i.e., InspireMD and Bone Biologics go up and down completely randomly.

Pair Corralation between InspireMD and Bone Biologics

Given the investment horizon of 90 days InspireMD is expected to generate 0.87 times more return on investment than Bone Biologics. However, InspireMD is 1.14 times less risky than Bone Biologics. It trades about 0.0 of its potential returns per unit of risk. Bone Biologics Corp is currently generating about -0.01 per unit of risk. If you would invest  287.00  in InspireMD on December 26, 2024 and sell it today you would lose (13.00) from holding InspireMD or give up 4.53% of portfolio value over 90 days.

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

InspireMD  vs.  Bone Biologics Corp

InspireMD

Risk-Adjusted Performance

Very Weak

Over the last 90 days InspireMD has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, InspireMD is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Bone Biologics Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Bone Biologics Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable essential indicators, Bone Biologics is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with InspireMD and Bone Biologics

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

The idea behind InspireMD and Bone Biologics 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.