Correlation Between Inspire Medical and Costco Wholesale
Can any of the company-specific risk be diversified away by investing in both Inspire Medical and Costco Wholesale 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 Inspire Medical and Costco Wholesale into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Inspire Medical Systems and Costco Wholesale Corp, you can compare the effects of market volatilities on Inspire Medical and Costco Wholesale 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 Inspire Medical with a short position of Costco Wholesale. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inspire Medical and Costco Wholesale.
Diversification Opportunities for Inspire Medical and Costco Wholesale
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Inspire and Costco is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Inspire Medical Systems and Costco Wholesale Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Costco Wholesale Corp and Inspire 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 Inspire Medical Systems are associated (or correlated) with Costco Wholesale. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Costco Wholesale Corp has no effect on the direction of Inspire Medical i.e., Inspire Medical and Costco Wholesale go up and down completely randomly.
Pair Corralation between Inspire Medical and Costco Wholesale
Given the investment horizon of 90 days Inspire Medical Systems is expected to generate 4.71 times more return on investment than Costco Wholesale. However, Inspire Medical is 4.71 times more volatile than Costco Wholesale Corp. It trades about 0.18 of its potential returns per unit of risk. Costco Wholesale Corp is currently generating about -0.13 per unit of risk. If you would invest 8,280 in Inspire Medical Systems on September 11, 2025 and sell it today you would earn a total of 5,727 from holding Inspire Medical Systems or generate 69.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Inspire Medical Systems vs. Costco Wholesale Corp
Performance |
| Timeline |
| Inspire Medical Systems |
| Costco Wholesale Corp |
Inspire Medical and Costco Wholesale Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Inspire Medical and Costco Wholesale
The main advantage of trading using opposite Inspire Medical and Costco Wholesale positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inspire Medical position performs unexpectedly, Costco Wholesale 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 Costco Wholesale will offset losses from the drop in Costco Wholesale's long position.| Inspire Medical vs. Integer Holdings Corp | Inspire Medical vs. Artivion | Inspire Medical vs. Addus HomeCare | Inspire Medical vs. Premier |
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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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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