Correlation Between Laboratory and InMode
Can any of the company-specific risk be diversified away by investing in both Laboratory 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 Laboratory and InMode into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Laboratory of and InMode, you can compare the effects of market volatilities on Laboratory 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 Laboratory with a short position of InMode. Check out your portfolio center. Please also check ongoing floating volatility patterns of Laboratory and InMode.
Diversification Opportunities for Laboratory and InMode
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Laboratory and InMode is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Laboratory of and InMode in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on InMode and Laboratory 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 Laboratory of 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 Laboratory i.e., Laboratory and InMode go up and down completely randomly.
Pair Corralation between Laboratory and InMode
Allowing for the 90-day total investment horizon Laboratory of is expected to generate 0.46 times more return on investment than InMode. However, Laboratory of is 2.17 times less risky than InMode. It trades about 0.08 of its potential returns per unit of risk. InMode is currently generating about -0.02 per unit of risk. If you would invest 23,994 in Laboratory of on December 2, 2024 and sell it today you would earn a total of 1,110 from holding Laboratory of or generate 4.63% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Laboratory of vs. InMode
Performance |
Timeline |
Laboratory |
InMode |
Laboratory and InMode Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Laboratory and InMode
The main advantage of trading using opposite Laboratory and InMode positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Laboratory 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.Laboratory vs. Quest Diagnostics Incorporated | Laboratory vs. Waters | Laboratory vs. Universal Health Services | Laboratory vs. Humana Inc |
InMode vs. TransMedics Group | InMode vs. Inspire Medical Systems | InMode vs. Insulet | InMode vs. DexCom Inc |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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