Correlation Between InMode and WILLIAMS

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

By analyzing existing cross correlation between InMode and WILLIAMS PARTNERS L, you can compare the effects of market volatilities on InMode and WILLIAMS 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 WILLIAMS. Check out your portfolio center. Please also check ongoing floating volatility patterns of InMode and WILLIAMS.

Diversification Opportunities for InMode and WILLIAMS

-0.47

Correlation Coefficient

InMode  WILLIAMS

Very good diversification

The 3 months correlation between InMode and WILLIAMS is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding InMode and WILLIAMS PARTNERS L in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WILLIAMS PARTNERS 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 WILLIAMS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WILLIAMS PARTNERS has no effect on the direction of InMode i.e., InMode and WILLIAMS go up and down completely randomly.

Pair Corralation between InMode and WILLIAMS

Given the investment horizon of 90 days InMode is expected to generate 3.21 times more return on investment than WILLIAMS. However, InMode is 3.21 times more volatile than WILLIAMS PARTNERS L. It trades about 0.09 of its potential returns per unit of risk. WILLIAMS PARTNERS L is currently generating about -0.1 per unit of risk. If you would invest  1,688  in InMode on September 16, 2024 and sell it today you would earn a total of  138.00  from holding InMode or generate 8.18% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	86.05%
Values	Daily Returns

InMode  vs.  WILLIAMS PARTNERS L

InMode

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in InMode are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak primary indicators, InMode may actually be approaching a critical reversion point that can send shares even higher in January 2025.

WILLIAMS PARTNERS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days WILLIAMS PARTNERS L has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, WILLIAMS 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 WILLIAMS

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

The idea behind InMode and WILLIAMS PARTNERS L 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.