Correlation Between Inari Medical and Hyperfine

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

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

Diversification Opportunities for Inari Medical and Hyperfine

-0.57

Correlation Coefficient

Inari Medical  Hyperfine

Excellent diversification

The 3 months correlation between Inari and Hyperfine is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Inari Medical and Hyperfine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyperfine and Inari Medical 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 Inari Medical are associated (or correlated) with Hyperfine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hyperfine has no effect on the direction of Inari Medical i.e., Inari Medical and Hyperfine go up and down completely randomly.

Pair Corralation between Inari Medical and Hyperfine

Given the investment horizon of 90 days Inari Medical is expected to generate 1.0 times more return on investment than Hyperfine. However, Inari Medical is 1.0 times less risky than Hyperfine. It trades about 0.1 of its potential returns per unit of risk. Hyperfine is currently generating about 0.02 per unit of risk. If you would invest  4,374  in Inari Medical on September 3, 2024 and sell it today you would earn a total of  818.00  from holding Inari Medical or generate 18.7% return on investment over 90 days.

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

Inari Medical  vs.  Hyperfine

Inari Medical

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Inari Medical are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite fairly abnormal basic indicators, Inari Medical demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Hyperfine

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Hyperfine are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Hyperfine is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Inari Medical and Hyperfine

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

The idea behind Inari Medical and Hyperfine 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .