Correlation Between Embecta Corp and Inspira Technologies

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

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

Diversification Opportunities for Embecta Corp and Inspira Technologies

-0.62

Correlation Coefficient

Embecta Corp  Inspira Technologies

Excellent diversification

The 3 months correlation between Embecta and Inspira is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Embecta Corp and Inspira Technologies Oxy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inspira Technologies Oxy and Embecta Corp 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 Embecta Corp are associated (or correlated) with Inspira Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inspira Technologies Oxy has no effect on the direction of Embecta Corp i.e., Embecta Corp and Inspira Technologies go up and down completely randomly.

Pair Corralation between Embecta Corp and Inspira Technologies

Given the investment horizon of 90 days Embecta Corp is expected to generate 0.96 times more return on investment than Inspira Technologies. However, Embecta Corp is 1.04 times less risky than Inspira Technologies. It trades about 0.14 of its potential returns per unit of risk. Inspira Technologies Oxy is currently generating about 0.0 per unit of risk. If you would invest  1,442  in Embecta Corp on September 26, 2024 and sell it today you would earn a total of  586.00  from holding Embecta Corp or generate 40.64% return on investment over 90 days.

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

Embecta Corp  vs.  Inspira Technologies Oxy

Embecta Corp

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Embecta Corp are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather inconsistent fundamental drivers, Embecta Corp exhibited solid returns over the last few months and may actually be approaching a breakup point.

Inspira Technologies Oxy

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Embecta Corp and Inspira Technologies

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

The idea behind Embecta Corp and Inspira Technologies Oxy 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.