Correlation Between Inari MedicalInc and Graphic Packaging

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

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

Diversification Opportunities for Inari MedicalInc and Graphic Packaging

-0.74

Correlation Coefficient

Inari MedicalInc  Graphic Packaging

Pay attention - limited upside

The 3 months correlation between Inari and Graphic is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Inari MedicalInc and Graphic Packaging Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Graphic Packaging Holding and Inari MedicalInc 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 MedicalInc are associated (or correlated) with Graphic Packaging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Graphic Packaging Holding has no effect on the direction of Inari MedicalInc i.e., Inari MedicalInc and Graphic Packaging go up and down completely randomly.

Pair Corralation between Inari MedicalInc and Graphic Packaging

Given the investment horizon of 90 days Inari MedicalInc is expected to under-perform the Graphic Packaging. In addition to that, Inari MedicalInc is 2.33 times more volatile than Graphic Packaging Holding. It trades about -0.04 of its total potential returns per unit of risk. Graphic Packaging Holding is currently generating about 0.04 per unit of volatility. If you would invest  2,424  in Graphic Packaging Holding on January 26, 2024 and sell it today you would earn a total of  317.00  from holding Graphic Packaging Holding or generate 13.08% return on investment over 90 days.

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

Inari MedicalInc  vs.  Graphic Packaging Holding

Inari MedicalInc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Inari MedicalInc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in May 2024. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Graphic Packaging Holding

Risk-Adjusted Performance

5 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Graphic Packaging Holding are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite quite unsteady basic indicators, Graphic Packaging may actually be approaching a critical reversion point that can send shares even higher in May 2024.

Pair Trading with Inari MedicalInc and Graphic Packaging

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

The idea behind Inari MedicalInc and Graphic Packaging Holding 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 Anywhere module to track or share privately all of your investments from the convenience of any device.