Correlation Between Align Technology and InMode

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

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

Diversification Opportunities for Align Technology and InMode

-0.39

Correlation Coefficient

Align Technology  InMode

Very good diversification

The 3 months correlation between Align and InMode is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Align Technology and InMode in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on InMode and Align Technology 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 Align Technology 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 Align Technology i.e., Align Technology and InMode go up and down completely randomly.

Pair Corralation between Align Technology and InMode

Given the investment horizon of 90 days Align Technology is expected to under-perform the InMode. In addition to that, Align Technology is 2.52 times more volatile than InMode. It trades about -0.08 of its total potential returns per unit of risk. InMode is currently generating about 0.08 per unit of volatility. If you would invest  1,396  in InMode on July 20, 2025 and sell it today you would earn a total of  135.00  from holding InMode or generate 9.67% return on investment over 90 days.

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

Align Technology  vs.  InMode

Align Technology

Risk-Adjusted Performance

Weakest

Over the last 90 days Align Technology has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's technical and fundamental indicators remain very healthy which may send shares a bit higher in November 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

InMode

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in InMode are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating primary indicators, InMode may actually be approaching a critical reversion point that can send shares even higher in November 2025.

Pair Trading with Align Technology and InMode

The main advantage of trading using opposite Align Technology and InMode positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Align Technology 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 Align Technology 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.