Correlation Between Tivic Health and Siemens Healthineers

Can any of the company-specific risk be diversified away by investing in both Tivic Health and Siemens Healthineers 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 Siemens Healthineers 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 Siemens Healthineers AG, you can compare the effects of market volatilities on Tivic Health and Siemens Healthineers 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 Siemens Healthineers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tivic Health and Siemens Healthineers.

Diversification Opportunities for Tivic Health and Siemens Healthineers

0.06

Correlation Coefficient

Tivic Health  Siemens Healthineers

Significant diversification

The 3 months correlation between Tivic and Siemens is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Tivic Health Systems and Siemens Healthineers AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siemens Healthineers 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 Siemens Healthineers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Siemens Healthineers has no effect on the direction of Tivic Health i.e., Tivic Health and Siemens Healthineers go up and down completely randomly.

Pair Corralation between Tivic Health and Siemens Healthineers

Given the investment horizon of 90 days Tivic Health Systems is expected to generate 8.43 times more return on investment than Siemens Healthineers. However, Tivic Health is 8.43 times more volatile than Siemens Healthineers AG. It trades about 0.04 of its potential returns per unit of risk. Siemens Healthineers AG is currently generating about 0.12 per unit of risk. If you would invest  29.00  in Tivic Health Systems on September 4, 2024 and sell it today you would lose (2.00) from holding Tivic Health Systems or give up 6.9% of portfolio value over 90 days.

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

Tivic Health Systems  vs.  Siemens Healthineers AG

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.

Siemens Healthineers

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Siemens Healthineers AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Siemens Healthineers is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Tivic Health and Siemens Healthineers

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

The idea behind Tivic Health Systems and Siemens Healthineers AG 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.