Correlation Between ICU MEDICAL and Inspire Medical
Can any of the company-specific risk be diversified away by investing in both ICU MEDICAL and Inspire Medical 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 ICU MEDICAL and Inspire Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ICU MEDICAL and Inspire Medical Systems, you can compare the effects of market volatilities on ICU MEDICAL and Inspire Medical 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 ICU MEDICAL with a short position of Inspire Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of ICU MEDICAL and Inspire Medical.
Diversification Opportunities for ICU MEDICAL and Inspire Medical
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ICU and Inspire is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding ICU MEDICAL and Inspire Medical Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inspire Medical Systems and ICU 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 ICU MEDICAL are associated (or correlated) with Inspire Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inspire Medical Systems has no effect on the direction of ICU MEDICAL i.e., ICU MEDICAL and Inspire Medical go up and down completely randomly.
Pair Corralation between ICU MEDICAL and Inspire Medical
Assuming the 90 days trading horizon ICU MEDICAL is expected to generate 0.73 times more return on investment than Inspire Medical. However, ICU MEDICAL is 1.37 times less risky than Inspire Medical. It trades about 0.1 of its potential returns per unit of risk. Inspire Medical Systems is currently generating about -0.01 per unit of risk. If you would invest 10,400 in ICU MEDICAL on August 19, 2025 and sell it today you would earn a total of 1,400 from holding ICU MEDICAL or generate 13.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ICU MEDICAL vs. Inspire Medical Systems
Performance |
| Timeline |
| ICU MEDICAL |
| Inspire Medical Systems |
ICU MEDICAL and Inspire Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ICU MEDICAL and Inspire Medical
The main advantage of trading using opposite ICU MEDICAL and Inspire Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ICU MEDICAL position performs unexpectedly, Inspire Medical 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 Inspire Medical will offset losses from the drop in Inspire Medical's long position.| ICU MEDICAL vs. Apple Inc | ICU MEDICAL vs. Apple Inc | ICU MEDICAL vs. Apple Inc | ICU MEDICAL vs. Apple Inc |
| Inspire Medical vs. LG Display Co | Inspire Medical vs. Perseus Mining Limited | Inspire Medical vs. DIAMCOR MINING INC | Inspire Medical vs. MINCO SILVER |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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