Correlation Between InMode and UOBSP

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

By analyzing existing cross correlation between InMode and UOBSP 3863 07 OCT 32, you can compare the effects of market volatilities on InMode and UOBSP 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 UOBSP. Check out your portfolio center. Please also check ongoing floating volatility patterns of InMode and UOBSP.

Diversification Opportunities for InMode and UOBSP

0.61

Correlation Coefficient

InMode  UOBSP

Poor diversification

The 3 months correlation between InMode and UOBSP is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding InMode and UOBSP 3863 07 OCT 32 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UOBSP 3863 07 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 UOBSP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UOBSP 3863 07 has no effect on the direction of InMode i.e., InMode and UOBSP go up and down completely randomly.

Pair Corralation between InMode and UOBSP

Given the investment horizon of 90 days InMode is expected to generate 10.36 times more return on investment than UOBSP. However, InMode is 10.36 times more volatile than UOBSP 3863 07 OCT 32. It trades about 0.07 of its potential returns per unit of risk. UOBSP 3863 07 OCT 32 is currently generating about -0.21 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 Together
Strength	Significant
Accuracy	26.56%
Values	Daily Returns

InMode  vs.  UOBSP 3863 07 OCT 32

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.

UOBSP 3863 07

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days UOBSP 3863 07 OCT 32 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, UOBSP 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 UOBSP

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

The idea behind InMode and UOBSP 3863 07 OCT 32 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.