Correlation Between Inogen and CareMax

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

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

Diversification Opportunities for Inogen and CareMax

0.18

Correlation Coefficient

Inogen  CareMax

Average diversification

The 3 months correlation between Inogen and CareMax is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Inogen Inc and CareMax in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CareMax 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 CareMax. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CareMax has no effect on the direction of Inogen i.e., Inogen and CareMax go up and down completely randomly.

Pair Corralation between Inogen and CareMax

Given the investment horizon of 90 days Inogen Inc is expected to generate 0.14 times more return on investment than CareMax. However, Inogen Inc is 7.19 times less risky than CareMax. It trades about -0.1 of its potential returns per unit of risk. CareMax is currently generating about -0.35 per unit of risk. If you would invest  952.00  in Inogen Inc on September 17, 2024 and sell it today you would lose (56.00) from holding Inogen Inc or give up 5.88% of portfolio value over 90 days.

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

Inogen Inc  vs.  CareMax

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.

CareMax

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CareMax has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Inogen and CareMax

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

The idea behind Inogen Inc and CareMax 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.