Correlation Between InMode and Ono Pharmaceutical

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

By analyzing existing cross correlation between InMode and Ono Pharmaceutical Co, you can compare the effects of market volatilities on InMode and Ono Pharmaceutical 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 Ono Pharmaceutical. Check out your portfolio center. Please also check ongoing floating volatility patterns of InMode and Ono Pharmaceutical.

Diversification Opportunities for InMode and Ono Pharmaceutical

-0.41

Correlation Coefficient

InMode  Ono Pharmaceutical

Very good diversification

The 3 months correlation between InMode and Ono is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding InMode and Ono Pharmaceutical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ono Pharmaceutical 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 Ono Pharmaceutical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ono Pharmaceutical has no effect on the direction of InMode i.e., InMode and Ono Pharmaceutical go up and down completely randomly.

Pair Corralation between InMode and Ono Pharmaceutical

Given the investment horizon of 90 days InMode is expected to generate 0.36 times more return on investment than Ono Pharmaceutical. However, InMode is 2.77 times less risky than Ono Pharmaceutical. It trades about 0.06 of its potential returns per unit of risk. Ono Pharmaceutical Co is currently generating about 0.01 per unit of risk. If you would invest  1,704  in InMode on September 13, 2024 and sell it today you would earn a total of  158.00  from holding InMode or generate 9.27% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	38.1%
Values	Daily Returns

InMode  vs.  Ono Pharmaceutical Co

InMode

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in InMode are ranked lower than 5 (%) 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.

Ono Pharmaceutical

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ono Pharmaceutical Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable essential indicators, Ono Pharmaceutical is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with InMode and Ono Pharmaceutical

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

The idea behind InMode and Ono Pharmaceutical Co 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.