Correlation Between Clearpoint Neuro and Inspire Medical

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

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

Diversification Opportunities for Clearpoint Neuro and Inspire Medical

-0.01

Correlation Coefficient

Clearpoint Neuro  Inspire Medical

Good diversification

The 3 months correlation between Clearpoint and Inspire is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Clearpoint Neuro and Inspire Medical Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inspire Medical Systems and Clearpoint Neuro 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 Clearpoint Neuro are associated (or correlated) with Inspire Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inspire Medical Systems has no effect on the direction of Clearpoint Neuro i.e., Clearpoint Neuro and Inspire Medical go up and down completely randomly.

Pair Corralation between Clearpoint Neuro and Inspire Medical

Given the investment horizon of 90 days Clearpoint Neuro is expected to generate 1.18 times more return on investment than Inspire Medical. However, Clearpoint Neuro is 1.18 times more volatile than Inspire Medical Systems. It trades about 0.04 of its potential returns per unit of risk. Inspire Medical Systems is currently generating about 0.01 per unit of risk. If you would invest  866.00  in Clearpoint Neuro on August 31, 2024 and sell it today you would earn a total of  345.00  from holding Clearpoint Neuro or generate 39.84% return on investment over 90 days.

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

Clearpoint Neuro  vs.  Inspire Medical Systems

Clearpoint Neuro

Risk-Adjusted Performance

0 of 100

Very Weak

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

Inspire Medical Systems

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Inspire Medical Systems are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Inspire Medical may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Pair Trading with Clearpoint Neuro and Inspire Medical

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

The idea behind Clearpoint Neuro and Inspire Medical Systems 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.