Correlation Between Biomerica and Tivic Health

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

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

Diversification Opportunities for Biomerica and Tivic Health

0.49

Correlation Coefficient

Biomerica  Tivic Health

Very weak diversification

The 3 months correlation between Biomerica and Tivic is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Biomerica and Tivic Health Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tivic Health Systems and Biomerica 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 Biomerica are associated (or correlated) with Tivic Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tivic Health Systems has no effect on the direction of Biomerica i.e., Biomerica and Tivic Health go up and down completely randomly.

Pair Corralation between Biomerica and Tivic Health

Given the investment horizon of 90 days Biomerica is expected to generate 0.68 times more return on investment than Tivic Health. However, Biomerica is 1.47 times less risky than Tivic Health. It trades about 0.01 of its potential returns per unit of risk. Tivic Health Systems is currently generating about 0.0 per unit of risk. If you would invest  30.00  in Biomerica on September 22, 2024 and sell it today you would lose (2.00) from holding Biomerica or give up 6.67% of portfolio value over 90 days.

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

Biomerica  vs.  Tivic Health Systems

Biomerica

Risk-Adjusted Performance

1 of 100

Weak

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

Tivic Health Systems

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Tivic Health Systems has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Tivic Health is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Biomerica and Tivic Health

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

The idea behind Biomerica and Tivic Health Systems 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.