Correlation Between Cytek Biosciences and Inari Medical

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

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

Diversification Opportunities for Cytek Biosciences and Inari Medical

-0.09

Correlation Coefficient

Cytek Biosciences  Inari Medical

Good diversification

The 3 months correlation between Cytek and Inari is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Cytek Biosciences and Inari Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inari Medical and Cytek Biosciences 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 Cytek Biosciences are associated (or correlated) with Inari Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inari Medical has no effect on the direction of Cytek Biosciences i.e., Cytek Biosciences and Inari Medical go up and down completely randomly.

Pair Corralation between Cytek Biosciences and Inari Medical

Given the investment horizon of 90 days Cytek Biosciences is expected to under-perform the Inari Medical. In addition to that, Cytek Biosciences is 1.06 times more volatile than Inari Medical. It trades about -0.09 of its total potential returns per unit of risk. Inari Medical is currently generating about -0.01 per unit of volatility. If you would invest  4,613  in Inari Medical on March 21, 2024 and sell it today you would lose (70.00) from holding Inari Medical or give up 1.52% of portfolio value over 90 days.

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

Cytek Biosciences  vs.  Inari Medical

Cytek Biosciences

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cytek Biosciences has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's forward-looking signals remain somewhat strong which may send shares a bit higher in July 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Inari Medical

Risk-Adjusted Performance

1 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Inari Medical are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong basic indicators, Inari Medical is not utilizing all of its potentials. The newest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Cytek Biosciences and Inari Medical

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

The idea behind Cytek Biosciences and Inari Medical 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.