Correlation Between Tivic Health and Co Diagnostics

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

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

Diversification Opportunities for Tivic Health and Co Diagnostics

0.36

Correlation Coefficient

Tivic Health  Co Diagnostics

Weak diversification

The 3 months correlation between Tivic and CODX is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Tivic Health Systems and Co Diagnostics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Co Diagnostics and Tivic Health 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 Tivic Health Systems are associated (or correlated) with Co Diagnostics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Co Diagnostics has no effect on the direction of Tivic Health i.e., Tivic Health and Co Diagnostics go up and down completely randomly.

Pair Corralation between Tivic Health and Co Diagnostics

Given the investment horizon of 90 days Tivic Health Systems is expected to generate 1.2 times more return on investment than Co Diagnostics. However, Tivic Health is 1.2 times more volatile than Co Diagnostics. It trades about -0.17 of its potential returns per unit of risk. Co Diagnostics is currently generating about -0.44 per unit of risk. If you would invest  25.00  in Tivic Health Systems on September 21, 2024 and sell it today you would lose (4.00) from holding Tivic Health Systems or give up 16.0% of portfolio value over 90 days.

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

Tivic Health Systems  vs.  Co Diagnostics

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.

Co Diagnostics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Co Diagnostics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's fundamental indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Tivic Health and Co Diagnostics

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

The idea behind Tivic Health Systems and Co Diagnostics 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.