Correlation Between Senseonics Holdings and InspireMD

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

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

Diversification Opportunities for Senseonics Holdings and InspireMD

0.25

Correlation Coefficient

Senseonics Holdings  InspireMD

Modest diversification

The 3 months correlation between Senseonics and InspireMD is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Senseonics Holdings and InspireMD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on InspireMD and Senseonics Holdings 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 Senseonics Holdings 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 Senseonics Holdings i.e., Senseonics Holdings and InspireMD go up and down completely randomly.

Pair Corralation between Senseonics Holdings and InspireMD

Given the investment horizon of 90 days Senseonics Holdings is expected to generate 54.67 times less return on investment than InspireMD. In addition to that, Senseonics Holdings is 1.34 times more volatile than InspireMD. It trades about 0.0 of its total potential returns per unit of risk. InspireMD is currently generating about 0.03 per unit of volatility. If you would invest  243.00  in InspireMD on October 5, 2024 and sell it today you would earn a total of  23.00  from holding InspireMD or generate 9.47% return on investment over 90 days.

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

Senseonics Holdings  vs.  InspireMD

Senseonics Holdings

Risk-Adjusted Performance

8 of 100

OK

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

InspireMD

Risk-Adjusted Performance

0 of 100

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.

Pair Trading with Senseonics Holdings and InspireMD

The main advantage of trading using opposite Senseonics Holdings and InspireMD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Senseonics Holdings 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 Senseonics Holdings 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.

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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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.