Correlation Between InMode and OMV AG

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Can any of the company-specific risk be diversified away by investing in both InMode and OMV AG 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 OMV AG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between InMode and OMV AG PK, you can compare the effects of market volatilities on InMode and OMV AG 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 OMV AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of InMode and OMV AG.

Diversification Opportunities for InMode and OMV AG

-0.79
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between InMode and OMV is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding InMode and OMV AG PK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OMV AG PK 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 OMV AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OMV AG PK has no effect on the direction of InMode i.e., InMode and OMV AG go up and down completely randomly.

Pair Corralation between InMode and OMV AG

Given the investment horizon of 90 days InMode is expected to under-perform the OMV AG. But the stock apears to be less risky and, when comparing its historical volatility, InMode is 4.88 times less risky than OMV AG. The stock trades about -0.03 of its potential returns per unit of risk. The OMV AG PK is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  1,112  in OMV AG PK on September 14, 2024 and sell it today you would lose (126.00) from holding OMV AG PK or give up 11.33% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy99.6%
ValuesDaily Returns

InMode  vs.  OMV AG PK

 Performance 
       Timeline  
InMode 

Risk-Adjusted Performance

4 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in InMode are ranked lower than 4 (%) 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 January 2025.
OMV AG PK 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days OMV AG PK has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong forward-looking signals, OMV AG is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

InMode and OMV AG Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with InMode and OMV AG

The main advantage of trading using opposite InMode and OMV AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if InMode position performs unexpectedly, OMV AG 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 OMV AG will offset losses from the drop in OMV AG's long position.
The idea behind InMode and OMV AG PK 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.

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