Correlation Between InspireMD and Beyond Air

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

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

Diversification Opportunities for InspireMD and Beyond Air

0.25

Correlation Coefficient

InspireMD  Beyond Air

Modest diversification

The 3 months correlation between InspireMD and Beyond is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding InspireMD and Beyond Air in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beyond Air 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 Beyond Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beyond Air has no effect on the direction of InspireMD i.e., InspireMD and Beyond Air go up and down completely randomly.

Pair Corralation between InspireMD and Beyond Air

Given the investment horizon of 90 days InspireMD is expected to generate 0.88 times more return on investment than Beyond Air. However, InspireMD is 1.14 times less risky than Beyond Air. It trades about 0.07 of its potential returns per unit of risk. Beyond Air is currently generating about -0.06 per unit of risk. If you would invest  92.00  in InspireMD on September 23, 2024 and sell it today you would earn a total of  208.00  from holding InspireMD or generate 226.09% return on investment over 90 days.

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

InspireMD  vs.  Beyond Air

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 January 2025.

Beyond Air

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Beyond Air are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Even with relatively inconsistent forward indicators, Beyond Air reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with InspireMD and Beyond Air

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

The idea behind InspireMD and Beyond Air 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.