Correlation Between InMode and 4 Less

Can any of the company-specific risk be diversified away by investing in both InMode and 4 Less 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 4 Less into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between InMode and 4 Less Group, you can compare the effects of market volatilities on InMode and 4 Less 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 4 Less. Check out your portfolio center. Please also check ongoing floating volatility patterns of InMode and 4 Less.

Diversification Opportunities for InMode and 4 Less

-0.62

Correlation Coefficient

InMode  4 Less

Excellent diversification

The 3 months correlation between InMode and FLES is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding InMode and 4 Less Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 4 Less Group 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 4 Less. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 4 Less Group has no effect on the direction of InMode i.e., InMode and 4 Less go up and down completely randomly.

Pair Corralation between InMode and 4 Less

Given the investment horizon of 90 days InMode is expected to under-perform the 4 Less. But the stock apears to be less risky and, when comparing its historical volatility, InMode is 11.65 times less risky than 4 Less. The stock trades about -0.31 of its potential returns per unit of risk. The 4 Less Group is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  0.02  in 4 Less Group on September 25, 2024 and sell it today you would earn a total of  0.00  from holding 4 Less Group or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	90.91%
Values	Daily Returns

InMode  vs.  4 Less Group

InMode

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in InMode are ranked lower than 2 (%) 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 recent stock price tumult, may contribute to shorter-term losses for the shareholders.

4 Less Group

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in 4 Less Group are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively inconsistent technical and fundamental indicators, 4 Less unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with InMode and 4 Less

The main advantage of trading using opposite InMode and 4 Less positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if InMode position performs unexpectedly, 4 Less 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 4 Less will offset losses from the drop in 4 Less' long position.

The idea behind InMode and 4 Less Group 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.