Correlation Between Inogen and Cerus

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

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

Diversification Opportunities for Inogen and Cerus

0.64

Correlation Coefficient

Inogen  Cerus

Poor diversification

The 3 months correlation between Inogen and Cerus is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Inogen Inc and Cerus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cerus and Inogen 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 Inogen Inc are associated (or correlated) with Cerus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cerus has no effect on the direction of Inogen i.e., Inogen and Cerus go up and down completely randomly.

Pair Corralation between Inogen and Cerus

Given the investment horizon of 90 days Inogen Inc is expected to generate 1.0 times more return on investment than Cerus. However, Inogen Inc is 1.0 times less risky than Cerus. It trades about -0.01 of its potential returns per unit of risk. Cerus is currently generating about -0.01 per unit of risk. If you would invest  1,987  in Inogen Inc on September 21, 2024 and sell it today you would lose (1,135) from holding Inogen Inc or give up 57.12% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	99.8%
Values	Daily Returns

Inogen Inc  vs.  Cerus

Inogen Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Inogen Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's technical and fundamental indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Cerus

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Inogen and Cerus

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

The idea behind Inogen Inc and Cerus 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.