Correlation Between Inogen and Paragon 28

Can any of the company-specific risk be diversified away by investing in both Inogen and Paragon 28 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 Paragon 28 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Inogen Inc and Paragon 28, you can compare the effects of market volatilities on Inogen and Paragon 28 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 Paragon 28. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inogen and Paragon 28.

Diversification Opportunities for Inogen and Paragon 28

0.23

Correlation Coefficient

Inogen  Paragon 28

Modest diversification

The 3 months correlation between Inogen and Paragon is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Inogen Inc and Paragon 28 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Paragon 28 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 Paragon 28. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Paragon 28 has no effect on the direction of Inogen i.e., Inogen and Paragon 28 go up and down completely randomly.

Pair Corralation between Inogen and Paragon 28

Given the investment horizon of 90 days Inogen Inc is expected to under-perform the Paragon 28. But the stock apears to be less risky and, when comparing its historical volatility, Inogen Inc is 1.92 times less risky than Paragon 28. The stock trades about -0.08 of its potential returns per unit of risk. The Paragon 28 is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  706.00  in Paragon 28 on September 16, 2024 and sell it today you would earn a total of  336.00  from holding Paragon 28 or generate 47.59% return on investment over 90 days.

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

Inogen Inc  vs.  Paragon 28

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.

Paragon 28

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Paragon 28 are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat conflicting basic indicators, Paragon 28 sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Inogen and Paragon 28

The main advantage of trading using opposite Inogen and Paragon 28 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inogen position performs unexpectedly, Paragon 28 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 Paragon 28 will offset losses from the drop in Paragon 28's long position.

The idea behind Inogen Inc and Paragon 28 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.