Correlation Between InspireMD and Rapid Therapeutic

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

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

Diversification Opportunities for InspireMD and Rapid Therapeutic

-0.14

Correlation Coefficient

InspireMD  Rapid Therapeutic

Good diversification

The 3 months correlation between InspireMD and Rapid is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding InspireMD and Rapid Therapeutic Science in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rapid Therapeutic Science 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 Rapid Therapeutic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rapid Therapeutic Science has no effect on the direction of InspireMD i.e., InspireMD and Rapid Therapeutic go up and down completely randomly.

Pair Corralation between InspireMD and Rapid Therapeutic

Given the investment horizon of 90 days InspireMD is expected to generate 7.32 times less return on investment than Rapid Therapeutic. But when comparing it to its historical volatility, InspireMD is 4.83 times less risky than Rapid Therapeutic. It trades about 0.1 of its potential returns per unit of risk. Rapid Therapeutic Science is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  0.10  in Rapid Therapeutic Science on October 11, 2024 and sell it today you would earn a total of  0.10  from holding Rapid Therapeutic Science or generate 100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	97.56%
Values	Daily Returns

InspireMD  vs.  Rapid Therapeutic Science

InspireMD

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in InspireMD are ranked lower than 3 (%) 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.

Rapid Therapeutic Science

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Rapid Therapeutic Science are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting basic indicators, Rapid Therapeutic disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with InspireMD and Rapid Therapeutic

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

The idea behind InspireMD and Rapid Therapeutic Science 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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.