Correlation Between Telesis Bio and Inari Medical

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

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

Diversification Opportunities for Telesis Bio and Inari Medical

0.0

Correlation Coefficient

Telesis Bio  Inari Medical

Pay attention - limited upside

The 3 months correlation between Telesis and Inari is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Telesis Bio and Inari Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inari Medical and Telesis Bio 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 Telesis Bio are associated (or correlated) with Inari Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inari Medical has no effect on the direction of Telesis Bio i.e., Telesis Bio and Inari Medical go up and down completely randomly.

Pair Corralation between Telesis Bio and Inari Medical

If you would invest  5,156  in Inari Medical on December 5, 2024 and sell it today you would earn a total of  2,841  from holding Inari Medical or generate 55.1% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Telesis Bio  vs.  Inari Medical

Telesis Bio

Risk-Adjusted Performance

Very Weak

Over the last 90 days Telesis Bio has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy forward indicators, Telesis Bio is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Inari Medical

Risk-Adjusted Performance

Good

Over the last 90 days Inari Medical has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly abnormal basic indicators, Inari Medical demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Telesis Bio and Inari Medical

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

The idea behind Telesis Bio and Inari Medical 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.

Check out your portfolio center.

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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.