Correlation Between InMode and BigBearai Holdings

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Can any of the company-specific risk be diversified away by investing in both InMode and BigBearai Holdings 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 InMode and BigBearai Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between InMode and BigBearai Holdings, you can compare the effects of market volatilities on InMode and BigBearai Holdings 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 InMode with a short position of BigBearai Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of InMode and BigBearai Holdings.

Diversification Opportunities for InMode and BigBearai Holdings

0.54
  Correlation Coefficient

Very weak diversification

The 3 months correlation between InMode and BigBearai is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding InMode and BigBearai Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BigBearai Holdings and InMode 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 InMode are associated (or correlated) with BigBearai Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BigBearai Holdings has no effect on the direction of InMode i.e., InMode and BigBearai Holdings go up and down completely randomly.

Pair Corralation between InMode and BigBearai Holdings

Given the investment horizon of 90 days InMode is expected to under-perform the BigBearai Holdings. But the stock apears to be less risky and, when comparing its historical volatility, InMode is 4.07 times less risky than BigBearai Holdings. The stock trades about -0.05 of its potential returns per unit of risk. The BigBearai Holdings is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest  182.00  in BigBearai Holdings on September 13, 2024 and sell it today you would earn a total of  116.00  from holding BigBearai Holdings or generate 63.74% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

InMode  vs.  BigBearai Holdings

 Performance 
       Timeline  
InMode 

Risk-Adjusted Performance

5 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in InMode are ranked lower than 5 (%) 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 January 2025.
BigBearai Holdings 

Risk-Adjusted Performance

13 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in BigBearai Holdings are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite fairly unsteady basic indicators, BigBearai Holdings demonstrated solid returns over the last few months and may actually be approaching a breakup point.

InMode and BigBearai Holdings Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with InMode and BigBearai Holdings

The main advantage of trading using opposite InMode and BigBearai Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if InMode position performs unexpectedly, BigBearai Holdings 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 BigBearai Holdings will offset losses from the drop in BigBearai Holdings' long position.
The idea behind InMode and BigBearai Holdings 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.

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