Correlation Between Inogen and InMode
Can any of the company-specific risk be diversified away by investing in both Inogen 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 Inogen and InMode into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Inogen Inc and InMode, you can compare the effects of market volatilities on Inogen 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 Inogen with a short position of InMode. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inogen and InMode.
Diversification Opportunities for Inogen and InMode
Weak diversification
The 3 months correlation between Inogen and InMode is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Inogen Inc and InMode in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on InMode and Inogen 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 Inogen Inc 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 Inogen i.e., Inogen and InMode go up and down completely randomly.
Pair Corralation between Inogen and InMode
Given the investment horizon of 90 days Inogen Inc is expected to under-perform the InMode. In addition to that, Inogen is 1.55 times more volatile than InMode. It trades about -0.02 of its total potential returns per unit of risk. InMode is currently generating about -0.03 per unit of volatility. If you would invest 1,793 in InMode on September 20, 2024 and sell it today you would lose (78.00) from holding InMode or give up 4.35% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Inogen Inc vs. InMode
Performance |
| Timeline |
| Inogen Inc |
| InMode |
Inogen and InMode Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Inogen and InMode
The main advantage of trading using opposite Inogen and InMode positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inogen 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 Inogen Inc 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
Other Complementary Tools
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device |