Correlation Between InMode and 548661EF0

Can any of the company-specific risk be diversified away by investing in both InMode and 548661EF0 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 548661EF0 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between InMode and LOW 445 01 APR 62, you can compare the effects of market volatilities on InMode and 548661EF0 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 548661EF0. Check out your portfolio center. Please also check ongoing floating volatility patterns of InMode and 548661EF0.

Diversification Opportunities for InMode and 548661EF0

-0.48

Correlation Coefficient

InMode  548661EF0

Very good diversification

The 3 months correlation between InMode and 548661EF0 is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding InMode and LOW 445 01 APR 62 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LOW 445 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 548661EF0. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LOW 445 01 has no effect on the direction of InMode i.e., InMode and 548661EF0 go up and down completely randomly.

Pair Corralation between InMode and 548661EF0

Given the investment horizon of 90 days InMode is expected to under-perform the 548661EF0. In addition to that, InMode is 2.31 times more volatile than LOW 445 01 APR 62. It trades about -0.07 of its total potential returns per unit of risk. LOW 445 01 APR 62 is currently generating about 0.21 per unit of volatility. If you would invest  7,991  in LOW 445 01 APR 62 on September 12, 2024 and sell it today you would earn a total of  382.00  from holding LOW 445 01 APR 62 or generate 4.78% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	95.45%
Values	Daily Returns

InMode  vs.  LOW 445 01 APR 62

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.

LOW 445 01

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days LOW 445 01 APR 62 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 548661EF0 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 548661EF0

The main advantage of trading using opposite InMode and 548661EF0 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if InMode position performs unexpectedly, 548661EF0 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 548661EF0 will offset losses from the drop in 548661EF0's long position.

The idea behind InMode and LOW 445 01 APR 62 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.