Correlation Between Nihon Kohden and Vivos Therapeutics

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

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

Diversification Opportunities for Nihon Kohden and Vivos Therapeutics

-0.25

Correlation Coefficient

Nihon Kohden  Vivos Therapeutics

Very good diversification

The 3 months correlation between Nihon and Vivos is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Nihon Kohden Corp and Vivos Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vivos Therapeutics and Nihon Kohden 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 Nihon Kohden Corp are associated (or correlated) with Vivos Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vivos Therapeutics has no effect on the direction of Nihon Kohden i.e., Nihon Kohden and Vivos Therapeutics go up and down completely randomly.

Pair Corralation between Nihon Kohden and Vivos Therapeutics

Assuming the 90 days horizon Nihon Kohden is expected to generate 4.76 times less return on investment than Vivos Therapeutics. But when comparing it to its historical volatility, Nihon Kohden Corp is 1.02 times less risky than Vivos Therapeutics. It trades about 0.04 of its potential returns per unit of risk. Vivos Therapeutics is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  293.00  in Vivos Therapeutics on September 21, 2024 and sell it today you would earn a total of  173.00  from holding Vivos Therapeutics or generate 59.04% return on investment over 90 days.

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

Nihon Kohden Corp  vs.  Vivos Therapeutics

Nihon Kohden Corp

Risk-Adjusted Performance

2 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Nihon Kohden Corp are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady forward-looking signals, Nihon Kohden may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Vivos Therapeutics

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Vivos Therapeutics are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively conflicting basic indicators, Vivos Therapeutics unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Nihon Kohden and Vivos Therapeutics

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

The idea behind Nihon Kohden Corp and Vivos Therapeutics 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.