Correlation Between BigBearai Holdings and InMode

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

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

Diversification Opportunities for BigBearai Holdings and InMode

0.43

Correlation Coefficient

BigBearai Holdings  InMode

Very weak diversification

The 3 months correlation between BigBearai and InMode is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding BigBearai Holdings and InMode in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on InMode and BigBearai Holdings 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 BigBearai Holdings are associated (or correlated) with InMode. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of InMode has no effect on the direction of BigBearai Holdings i.e., BigBearai Holdings and InMode go up and down completely randomly.

Pair Corralation between BigBearai Holdings and InMode

Given the investment horizon of 90 days BigBearai Holdings is expected to under-perform the InMode. In addition to that, BigBearai Holdings is 5.59 times more volatile than InMode. It trades about -0.02 of its total potential returns per unit of risk. InMode is currently generating about 0.09 per unit of volatility. If you would invest  1,663  in InMode on December 29, 2024 and sell it today you would earn a total of  167.00  from holding InMode or generate 10.04% return on investment over 90 days.

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

BigBearai Holdings  vs.  InMode

BigBearai Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days BigBearai Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Stock's basic indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

InMode

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in InMode are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak primary indicators, InMode may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with BigBearai Holdings and InMode

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

The idea behind BigBearai Holdings and InMode 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.