Correlation Between Monogram Orthopaedics and InMode

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

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

Diversification Opportunities for Monogram Orthopaedics and InMode

-0.09

Correlation Coefficient

Monogram Orthopaedics  InMode

Good diversification

The 3 months correlation between Monogram and InMode is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Monogram Orthopaedics Common and InMode in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on InMode and Monogram Orthopaedics 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 Monogram Orthopaedics Common 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 Monogram Orthopaedics i.e., Monogram Orthopaedics and InMode go up and down completely randomly.

Pair Corralation between Monogram Orthopaedics and InMode

Given the investment horizon of 90 days Monogram Orthopaedics Common is expected to generate 4.2 times more return on investment than InMode. However, Monogram Orthopaedics is 4.2 times more volatile than InMode. It trades about 0.07 of its potential returns per unit of risk. InMode is currently generating about 0.09 per unit of risk. If you would invest  236.00  in Monogram Orthopaedics Common on December 29, 2024 and sell it today you would earn a total of  43.00  from holding Monogram Orthopaedics Common or generate 18.22% return on investment over 90 days.

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

Monogram Orthopaedics Common  vs.  InMode

Monogram Orthopaedics

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Monogram Orthopaedics Common are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Monogram Orthopaedics displayed solid returns over the last few months and may actually be approaching a breakup point.

InMode

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in InMode are ranked lower than 7 (%) 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 April 2025.

Pair Trading with Monogram Orthopaedics and InMode

The main advantage of trading using opposite Monogram Orthopaedics and InMode positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Monogram Orthopaedics 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 Monogram Orthopaedics Common 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 Transaction History module to view history of all your transactions and understand their impact on performance.