Correlation Between InMode and NOVANT

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

By analyzing existing cross correlation between InMode and NOVANT 2637 01 NOV 36, you can compare the effects of market volatilities on InMode and NOVANT 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 NOVANT. Check out your portfolio center. Please also check ongoing floating volatility patterns of InMode and NOVANT.

Diversification Opportunities for InMode and NOVANT

-0.85

Correlation Coefficient

InMode  NOVANT

Pay attention - limited upside

The 3 months correlation between InMode and NOVANT is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding InMode and NOVANT 2637 01 NOV 36 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NOVANT 2637 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 NOVANT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NOVANT 2637 01 has no effect on the direction of InMode i.e., InMode and NOVANT go up and down completely randomly.

Pair Corralation between InMode and NOVANT

Given the investment horizon of 90 days InMode is expected to generate 1.64 times more return on investment than NOVANT. However, InMode is 1.64 times more volatile than NOVANT 2637 01 NOV 36. It trades about 0.0 of its potential returns per unit of risk. NOVANT 2637 01 NOV 36 is currently generating about -0.05 per unit of risk. If you would invest  1,912  in InMode on December 3, 2024 and sell it today you would lose (23.00) from holding InMode or give up 1.2% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	32.79%
Values	Daily Returns

InMode  vs.  NOVANT 2637 01 NOV 36

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.

NOVANT 2637 01

Risk-Adjusted Performance

Very Weak

Over the last 90 days NOVANT 2637 01 NOV 36 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, NOVANT 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 NOVANT

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

The idea behind InMode and NOVANT 2637 01 NOV 36 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.