Correlation Between InspireMD and Heart Test

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

By analyzing existing cross correlation between InspireMD and Heart Test Laboratories, you can compare the effects of market volatilities on InspireMD and Heart Test 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 Heart Test. Check out your portfolio center. Please also check ongoing floating volatility patterns of InspireMD and Heart Test.

Diversification Opportunities for InspireMD and Heart Test

0.62

Correlation Coefficient

InspireMD  Heart Test

Poor diversification

The 3 months correlation between InspireMD and Heart is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding InspireMD and Heart Test Laboratories in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Heart Test Laboratories 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 Heart Test. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Heart Test Laboratories has no effect on the direction of InspireMD i.e., InspireMD and Heart Test go up and down completely randomly.

Pair Corralation between InspireMD and Heart Test

Given the investment horizon of 90 days InspireMD is expected to generate 0.53 times more return on investment than Heart Test. However, InspireMD is 1.9 times less risky than Heart Test. It trades about 0.06 of its potential returns per unit of risk. Heart Test Laboratories is currently generating about 0.01 per unit of risk. If you would invest  249.00  in InspireMD on October 20, 2024 and sell it today you would earn a total of  23.00  from holding InspireMD or generate 9.24% return on investment over 90 days.

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

InspireMD  vs.  Heart Test Laboratories

InspireMD

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in InspireMD are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Even with relatively fragile basic indicators, InspireMD may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Heart Test Laboratories

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Heart Test Laboratories has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable fundamental indicators, Heart Test is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with InspireMD and Heart Test

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

The idea behind InspireMD and Heart Test Laboratories 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.