Correlation Between Veeva Systems and InMode

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

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

Diversification Opportunities for Veeva Systems and InMode

0.59

Correlation Coefficient

Veeva Systems  InMode

Very weak diversification

The 3 months correlation between Veeva and InMode is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Veeva Systems Class and InMode in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on InMode and Veeva Systems 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 Veeva Systems Class 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 Veeva Systems i.e., Veeva Systems and InMode go up and down completely randomly.

Pair Corralation between Veeva Systems and InMode

Given the investment horizon of 90 days Veeva Systems Class is expected to generate 0.95 times more return on investment than InMode. However, Veeva Systems Class is 1.05 times less risky than InMode. It trades about 0.11 of its potential returns per unit of risk. InMode is currently generating about 0.09 per unit of risk. If you would invest  21,147  in Veeva Systems Class on December 28, 2024 and sell it today you would earn a total of  2,601  from holding Veeva Systems Class or generate 12.3% return on investment over 90 days.

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

Veeva Systems Class  vs.  InMode

Veeva Systems Class

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Veeva Systems Class are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak technical and fundamental indicators, Veeva Systems showed 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 Veeva Systems and InMode

The main advantage of trading using opposite Veeva Systems and InMode positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Veeva Systems 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 Veeva Systems Class 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.

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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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.