Correlation Between Koss and InMode

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

By analyzing existing cross correlation between Koss Corporation and InMode, you can compare the effects of market volatilities on Koss and InMode 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 Koss with a short position of InMode. Check out your portfolio center. Please also check ongoing floating volatility patterns of Koss and InMode.

Diversification Opportunities for Koss and InMode

-0.22

Correlation Coefficient

Koss  InMode

Very good diversification

The 3 months correlation between Koss and InMode is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Koss Corp. and InMode in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on InMode and Koss 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 Koss Corporation are associated (or correlated) with InMode. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of InMode has no effect on the direction of Koss i.e., Koss and InMode go up and down completely randomly.

Pair Corralation between Koss and InMode

Given the investment horizon of 90 days Koss Corporation is expected to under-perform the InMode. In addition to that, Koss is 1.7 times more volatile than InMode. It trades about -0.11 of its total potential returns per unit of risk. InMode is currently generating about -0.04 per unit of volatility. If you would invest  1,719  in InMode on October 20, 2024 and sell it today you would lose (40.00) from holding InMode or give up 2.33% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Koss Corp.  vs.  InMode

Koss

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Koss Corporation has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

InMode

Risk-Adjusted Performance

0 of 100

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.

Pair Trading with Koss and InMode

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

The idea behind Koss Corporation and InMode 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.