Correlation Between Integra LifeSciences and InMode

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

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

Diversification Opportunities for Integra LifeSciences and InMode

-0.09

Correlation Coefficient

Integra LifeSciences  InMode

Good diversification

The 3 months correlation between Integra and InMode is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Integra LifeSciences Holdings and InMode in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on InMode and Integra LifeSciences 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 Integra LifeSciences 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 Integra LifeSciences i.e., Integra LifeSciences and InMode go up and down completely randomly.

Pair Corralation between Integra LifeSciences and InMode

Given the investment horizon of 90 days Integra LifeSciences is expected to generate 13.8 times less return on investment than InMode. In addition to that, Integra LifeSciences is 1.57 times more volatile than InMode. It trades about 0.0 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 Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Integra LifeSciences Holdings  vs.  InMode

Integra LifeSciences

Risk-Adjusted Performance

Very Weak

Over the last 90 days Integra LifeSciences Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Integra LifeSciences is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

InMode

Risk-Adjusted Performance

Insignificant

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 Integra LifeSciences and InMode

The main advantage of trading using opposite Integra LifeSciences and InMode positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Integra LifeSciences 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 Integra LifeSciences 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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.