Correlation Between InMode and SOLEIN

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

By analyzing existing cross correlation between InMode and SOLEIN 7125 01 OCT 27, you can compare the effects of market volatilities on InMode and SOLEIN 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 SOLEIN. Check out your portfolio center. Please also check ongoing floating volatility patterns of InMode and SOLEIN.

Diversification Opportunities for InMode and SOLEIN

0.1

Correlation Coefficient

InMode  SOLEIN

Average diversification

The 3 months correlation between InMode and SOLEIN is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding InMode and SOLEIN 7125 01 OCT 27 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SOLEIN 7125 01 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 SOLEIN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SOLEIN 7125 01 has no effect on the direction of InMode i.e., InMode and SOLEIN go up and down completely randomly.

Pair Corralation between InMode and SOLEIN

Given the investment horizon of 90 days InMode is expected to under-perform the SOLEIN. In addition to that, InMode is 9.01 times more volatile than SOLEIN 7125 01 OCT 27. It trades about -0.02 of its total potential returns per unit of risk. SOLEIN 7125 01 OCT 27 is currently generating about -0.04 per unit of volatility. If you would invest  10,173  in SOLEIN 7125 01 OCT 27 on December 2, 2024 and sell it today you would lose (33.00) from holding SOLEIN 7125 01 OCT 27 or give up 0.32% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	57.38%
Values	Daily Returns

InMode  vs.  SOLEIN 7125 01 OCT 27

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.

SOLEIN 7125 01

Risk-Adjusted Performance

Very Weak

Over the last 90 days SOLEIN 7125 01 OCT 27 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, SOLEIN is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with InMode and SOLEIN

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

The idea behind InMode and SOLEIN 7125 01 OCT 27 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .