Correlation Between GlucoTrack and InMode

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

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

Diversification Opportunities for GlucoTrack and InMode

-0.68

Correlation Coefficient

GlucoTrack  InMode

Excellent diversification

The 3 months correlation between GlucoTrack and InMode is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding GlucoTrack and InMode in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on InMode and GlucoTrack 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 GlucoTrack 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 GlucoTrack i.e., GlucoTrack and InMode go up and down completely randomly.

Pair Corralation between GlucoTrack and InMode

Given the investment horizon of 90 days GlucoTrack is expected to generate 8.43 times more return on investment than InMode. However, GlucoTrack is 8.43 times more volatile than InMode. It trades about 0.21 of its potential returns per unit of risk. InMode is currently generating about -0.43 per unit of risk. If you would invest  33.00  in GlucoTrack on February 1, 2024 and sell it today you would earn a total of  20.00  from holding GlucoTrack or generate 60.61% return on investment over 90 days.

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

GlucoTrack  vs.  InMode

GlucoTrack

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in GlucoTrack are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite quite unsteady basic indicators, GlucoTrack disclosed solid returns over the last few months and may actually be approaching a breakup point.

InMode

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days InMode has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's primary indicators remain rather sound which may send shares a bit higher in June 2024. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with GlucoTrack and InMode

The main advantage of trading using opposite GlucoTrack and InMode positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GlucoTrack 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 GlucoTrack 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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.