Correlation Between InMode and PayPal Holdings
Can any of the company-specific risk be diversified away by investing in both InMode and PayPal 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 PayPal Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between InMode and PayPal Holdings, you can compare the effects of market volatilities on InMode and PayPal 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 PayPal Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of InMode and PayPal Holdings.
Diversification Opportunities for InMode and PayPal Holdings
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between InMode and PayPal is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding InMode and PayPal Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PayPal 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 PayPal Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PayPal Holdings has no effect on the direction of InMode i.e., InMode and PayPal Holdings go up and down completely randomly.
Pair Corralation between InMode and PayPal Holdings
Given the investment horizon of 90 days InMode is expected to under-perform the PayPal Holdings. In addition to that, InMode is 1.66 times more volatile than PayPal Holdings. It trades about -0.05 of its total potential returns per unit of risk. PayPal Holdings is currently generating about 0.15 per unit of volatility. If you would invest 8,640 in PayPal Holdings on September 13, 2024 and sell it today you would earn a total of 415.00 from holding PayPal Holdings or generate 4.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
InMode vs. PayPal Holdings
Performance |
| Timeline |
| InMode |
| PayPal Holdings |
InMode and PayPal Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with InMode and PayPal Holdings
The main advantage of trading using opposite InMode and PayPal Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if InMode position performs unexpectedly, PayPal 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 PayPal Holdings will offset losses from the drop in PayPal Holdings' long position.| InMode vs. TransMedics Group | InMode vs. Inspire Medical Systems | InMode vs. Inari Medical | InMode vs. Insulet |
| PayPal Holdings vs. SoFi Technologies | PayPal Holdings vs. Visa Class A | PayPal Holdings vs. Capital One Financial | PayPal Holdings vs. American Express |
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 CEOs Directory module to screen CEOs from public companies around the world.
Other Complementary Tools
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. |