Correlation Between Inogen and Pulmonx Corp

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

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

Diversification Opportunities for Inogen and Pulmonx Corp

0.2

Correlation Coefficient

Inogen  Pulmonx Corp

Modest diversification

The 3 months correlation between Inogen and Pulmonx is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Inogen Inc and Pulmonx Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pulmonx Corp 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 Pulmonx Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pulmonx Corp has no effect on the direction of Inogen i.e., Inogen and Pulmonx Corp go up and down completely randomly.

Pair Corralation between Inogen and Pulmonx Corp

Given the investment horizon of 90 days Inogen Inc is expected to generate 0.85 times more return on investment than Pulmonx Corp. However, Inogen Inc is 1.17 times less risky than Pulmonx Corp. It trades about 0.09 of its potential returns per unit of risk. Pulmonx Corp is currently generating about -0.02 per unit of risk. If you would invest  938.00  in Inogen Inc on August 17, 2024 and sell it today you would earn a total of  67.00  from holding Inogen Inc or generate 7.14% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.65%
Values	Daily Returns

Inogen Inc  vs.  Pulmonx Corp

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 December 2024. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pulmonx Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pulmonx Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Pulmonx Corp is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Inogen and Pulmonx Corp

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

The idea behind Inogen Inc and Pulmonx Corp 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.