Correlation Between InMode and Voestalpine
Can any of the company-specific risk be diversified away by investing in both InMode and Voestalpine 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 Voestalpine into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between InMode and Voestalpine AG PK, you can compare the effects of market volatilities on InMode and Voestalpine 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 Voestalpine. Check out your portfolio center. Please also check ongoing floating volatility patterns of InMode and Voestalpine.
Diversification Opportunities for InMode and Voestalpine
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between InMode and Voestalpine is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding InMode and Voestalpine AG PK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voestalpine AG PK 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 Voestalpine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voestalpine AG PK has no effect on the direction of InMode i.e., InMode and Voestalpine go up and down completely randomly.
Pair Corralation between InMode and Voestalpine
Given the investment horizon of 90 days InMode is expected to under-perform the Voestalpine. In addition to that, InMode is 1.16 times more volatile than Voestalpine AG PK. It trades about -0.07 of its total potential returns per unit of risk. Voestalpine AG PK is currently generating about 0.0 per unit of volatility. If you would invest 375.00 in Voestalpine AG PK on September 19, 2024 and sell it today you would lose (1.00) from holding Voestalpine AG PK or give up 0.27% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
InMode vs. Voestalpine AG PK
Performance |
| Timeline |
| InMode |
| Voestalpine AG PK |
InMode and Voestalpine Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with InMode and Voestalpine
The main advantage of trading using opposite InMode and Voestalpine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if InMode position performs unexpectedly, Voestalpine 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 Voestalpine will offset losses from the drop in Voestalpine's long position.The idea behind InMode and Voestalpine AG PK 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.| Voestalpine vs. ArcelorMittal SA ADR | Voestalpine vs. Gerdau SA ADR | Voestalpine vs. POSCO Holdings | Voestalpine vs. HUMANA INC |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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