Correlation Between InMode and 37940XAP7

Can any of the company-specific risk be diversified away by investing in both InMode and 37940XAP7 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 37940XAP7 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between InMode and GPN 495 15 AUG 27, you can compare the effects of market volatilities on InMode and 37940XAP7 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 37940XAP7. Check out your portfolio center. Please also check ongoing floating volatility patterns of InMode and 37940XAP7.

Diversification Opportunities for InMode and 37940XAP7

-0.41

Correlation Coefficient

InMode  37940XAP7

Very good diversification

The 3 months correlation between InMode and 37940XAP7 is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding InMode and GPN 495 15 AUG 27 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GPN 495 15 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 37940XAP7. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GPN 495 15 has no effect on the direction of InMode i.e., InMode and 37940XAP7 go up and down completely randomly.

Pair Corralation between InMode and 37940XAP7

Given the investment horizon of 90 days InMode is expected to generate 2.09 times more return on investment than 37940XAP7. However, InMode is 2.09 times more volatile than GPN 495 15 AUG 27. It trades about 0.07 of its potential returns per unit of risk. GPN 495 15 AUG 27 is currently generating about -0.07 per unit of risk. If you would invest  1,675  in InMode on September 12, 2024 and sell it today you would earn a total of  181.00  from holding InMode or generate 10.81% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

InMode  vs.  GPN 495 15 AUG 27

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 exhibited solid returns over the last few months and may actually be approaching a breakup point.

GPN 495 15

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GPN 495 15 AUG 27 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 37940XAP7 is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with InMode and 37940XAP7

The main advantage of trading using opposite InMode and 37940XAP7 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if InMode position performs unexpectedly, 37940XAP7 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 37940XAP7 will offset losses from the drop in 37940XAP7's long position.

The idea behind InMode and GPN 495 15 AUG 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.