Correlation Between InMode and Casio Computer

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

By analyzing existing cross correlation between InMode and Casio Computer CoLtd, you can compare the effects of market volatilities on InMode and Casio Computer 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 Casio Computer. Check out your portfolio center. Please also check ongoing floating volatility patterns of InMode and Casio Computer.

Diversification Opportunities for InMode and Casio Computer

-0.59

Correlation Coefficient

InMode  Casio Computer

Excellent diversification

The 3 months correlation between InMode and Casio is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding InMode and Casio Computer CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Casio Computer CoLtd 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 Casio Computer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Casio Computer CoLtd has no effect on the direction of InMode i.e., InMode and Casio Computer go up and down completely randomly.

Pair Corralation between InMode and Casio Computer

If you would invest  1,774  in InMode on September 19, 2024 and sell it today you would earn a total of  23.00  from holding InMode or generate 1.3% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	1.59%
Values	Daily Returns

InMode  vs.  Casio Computer CoLtd

InMode

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in InMode are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound primary indicators, InMode is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Casio Computer CoLtd

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Casio Computer CoLtd has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Casio Computer is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with InMode and Casio Computer

The main advantage of trading using opposite InMode and Casio Computer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if InMode position performs unexpectedly, Casio Computer 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 Casio Computer will offset losses from the drop in Casio Computer's long position.

The idea behind InMode and Casio Computer CoLtd 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.