Correlation Between InMode and Intuitive Machines

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

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

Diversification Opportunities for InMode and Intuitive Machines

-0.4

Correlation Coefficient

InMode  Intuitive Machines

Very good diversification

The 3 months correlation between InMode and Intuitive is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding InMode and Intuitive Machines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intuitive Machines and InMode 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 InMode are associated (or correlated) with Intuitive Machines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intuitive Machines has no effect on the direction of InMode i.e., InMode and Intuitive Machines go up and down completely randomly.

Pair Corralation between InMode and Intuitive Machines

Given the investment horizon of 90 days InMode is expected to under-perform the Intuitive Machines. But the stock apears to be less risky and, when comparing its historical volatility, InMode is 3.32 times less risky than Intuitive Machines. The stock trades about -0.01 of its potential returns per unit of risk. The Intuitive Machines is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  1,282  in Intuitive Machines on December 4, 2024 and sell it today you would earn a total of  64.00  from holding Intuitive Machines or generate 4.99% return on investment over 90 days.

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

InMode  vs.  Intuitive Machines

InMode

Risk-Adjusted Performance

Very Weak

Over the last 90 days InMode has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound primary indicators, InMode is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Intuitive Machines

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Intuitive Machines are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Even with relatively abnormal basic indicators, Intuitive Machines reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with InMode and Intuitive Machines

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

The idea behind InMode and Intuitive Machines 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.

Check out your portfolio center.

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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.