Correlation Between Masimo and InMode

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

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

Diversification Opportunities for Masimo and InMode

0.55

Correlation Coefficient

Masimo  InMode

Very weak diversification

The 3 months correlation between Masimo and InMode is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Masimo and InMode in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on InMode and Masimo 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 Masimo 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 Masimo i.e., Masimo and InMode go up and down completely randomly.

Pair Corralation between Masimo and InMode

Given the investment horizon of 90 days Masimo is expected to generate 1.06 times more return on investment than InMode. However, Masimo is 1.06 times more volatile than InMode. It trades about 0.01 of its potential returns per unit of risk. InMode is currently generating about -0.11 per unit of risk. If you would invest  16,821  in Masimo on March 14, 2025 and sell it today you would lose (120.00) from holding Masimo or give up 0.71% of portfolio value over 90 days.

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

Masimo  vs.  InMode

Masimo

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Masimo are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong basic indicators, Masimo is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

InMode

Risk-Adjusted Performance

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 July 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Masimo and InMode

The main advantage of trading using opposite Masimo and InMode positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Masimo 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 Masimo 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.

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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.