Correlation Between InMode and WPLAU

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

By analyzing existing cross correlation between InMode and WPLAU 37 15 MAR 28, you can compare the effects of market volatilities on InMode and WPLAU 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 WPLAU. Check out your portfolio center. Please also check ongoing floating volatility patterns of InMode and WPLAU.

Diversification Opportunities for InMode and WPLAU

0.73

Correlation Coefficient

InMode  WPLAU

Poor diversification

The 3 months correlation between InMode and WPLAU is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding InMode and WPLAU 37 15 MAR 28 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WPLAU 37 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 WPLAU. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WPLAU 37 15 has no effect on the direction of InMode i.e., InMode and WPLAU go up and down completely randomly.

Pair Corralation between InMode and WPLAU

Given the investment horizon of 90 days InMode is expected to generate 3.71 times more return on investment than WPLAU. However, InMode is 3.71 times more volatile than WPLAU 37 15 MAR 28. It trades about -0.07 of its potential returns per unit of risk. WPLAU 37 15 MAR 28 is currently generating about -0.37 per unit of risk. If you would invest  1,824  in InMode on September 21, 2024 and sell it today you would lose (77.00) from holding InMode or give up 4.22% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	36.36%
Values	Daily Returns

InMode  vs.  WPLAU 37 15 MAR 28

InMode

Risk-Adjusted Performance

2 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in InMode are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather conflicting primary indicators, InMode may actually be approaching a critical reversion point that can send shares even higher in January 2025.

WPLAU 37 15

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days WPLAU 37 15 MAR 28 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for WPLAU 37 15 MAR 28 investors.

Pair Trading with InMode and WPLAU

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

The idea behind InMode and WPLAU 37 15 MAR 28 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.