Correlation Between Definitive Healthcare and InMode
Can any of the company-specific risk be diversified away by investing in both Definitive Healthcare 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 Definitive Healthcare and InMode into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Definitive Healthcare Corp and InMode, you can compare the effects of market volatilities on Definitive Healthcare 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 Definitive Healthcare with a short position of InMode. Check out your portfolio center. Please also check ongoing floating volatility patterns of Definitive Healthcare and InMode.
Diversification Opportunities for Definitive Healthcare and InMode
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Definitive and InMode is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Definitive Healthcare Corp and InMode in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on InMode and Definitive Healthcare 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 Definitive Healthcare Corp 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 Definitive Healthcare i.e., Definitive Healthcare and InMode go up and down completely randomly.
Pair Corralation between Definitive Healthcare and InMode
Allowing for the 90-day total investment horizon Definitive Healthcare Corp is expected to generate 0.98 times more return on investment than InMode. However, Definitive Healthcare Corp is 1.02 times less risky than InMode. It trades about 0.01 of its potential returns per unit of risk. InMode is currently generating about -0.02 per unit of risk. If you would invest 416.00 in Definitive Healthcare Corp on September 25, 2024 and sell it today you would lose (2.00) from holding Definitive Healthcare Corp or give up 0.48% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Definitive Healthcare Corp vs. InMode
Performance |
Timeline |
Definitive Healthcare |
InMode |
Definitive Healthcare and InMode Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Definitive Healthcare and InMode
The main advantage of trading using opposite Definitive Healthcare and InMode positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Definitive Healthcare 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.Definitive Healthcare vs. GeneDx Holdings Corp | Definitive Healthcare vs. LMF Acquisition Opportunities | Definitive Healthcare vs. Humacyte | Definitive Healthcare vs. Aquagold International |
InMode vs. Cigna Corp | InMode vs. Definitive Healthcare Corp | InMode vs. Guardant Health | InMode vs. Laboratory of |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
Other Complementary Tools
FinTech Suite Use AI to screen and filter profitable investment opportunities | |
Content Syndication Quickly integrate customizable finance content to your own investment portal | |
Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets |