Correlation Between Vivani Medical and Alx Oncology

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

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

Diversification Opportunities for Vivani Medical and Alx Oncology

-0.45

Correlation Coefficient

Vivani Medical  Alx Oncology

Very good diversification

The 3 months correlation between Vivani and Alx is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Vivani Medical and Alx Oncology Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alx Oncology Holdings and Vivani Medical 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 Vivani Medical are associated (or correlated) with Alx Oncology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alx Oncology Holdings has no effect on the direction of Vivani Medical i.e., Vivani Medical and Alx Oncology go up and down completely randomly.

Pair Corralation between Vivani Medical and Alx Oncology

Given the investment horizon of 90 days Vivani Medical is expected to generate 3.54 times less return on investment than Alx Oncology. But when comparing it to its historical volatility, Vivani Medical is 2.05 times less risky than Alx Oncology. It trades about 0.0 of its potential returns per unit of risk. Alx Oncology Holdings is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  181.00  in Alx Oncology Holdings on September 25, 2024 and sell it today you would lose (19.00) from holding Alx Oncology Holdings or give up 10.5% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

Vivani Medical  vs.  Alx Oncology Holdings

Vivani Medical

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days Vivani Medical has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Vivani Medical is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Alx Oncology Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Alx Oncology Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Alx Oncology is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Vivani Medical and Alx Oncology

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

The idea behind Vivani Medical and Alx Oncology Holdings 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.