Correlation Between Vivani Medical and ICON PLC

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

By analyzing existing cross correlation between Vivani Medical and ICON PLC, you can compare the effects of market volatilities on Vivani Medical and ICON PLC 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 ICON PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vivani Medical and ICON PLC.

Diversification Opportunities for Vivani Medical and ICON PLC

-0.68

Correlation Coefficient

Vivani Medical  ICON PLC

Excellent diversification

The 3 months correlation between Vivani and ICON is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Vivani Medical and ICON PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ICON PLC 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 ICON PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ICON PLC has no effect on the direction of Vivani Medical i.e., Vivani Medical and ICON PLC go up and down completely randomly.

Pair Corralation between Vivani Medical and ICON PLC

Given the investment horizon of 90 days Vivani Medical is expected to generate 0.9 times more return on investment than ICON PLC. However, Vivani Medical is 1.11 times less risky than ICON PLC. It trades about 0.1 of its potential returns per unit of risk. ICON PLC is currently generating about -0.16 per unit of risk. If you would invest  123.00  in Vivani Medical on September 1, 2024 and sell it today you would earn a total of  21.00  from holding Vivani Medical or generate 17.07% return on investment over 90 days.

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

Vivani Medical  vs.  ICON PLC

Vivani Medical

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Vivani Medical are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak basic indicators, Vivani Medical demonstrated solid returns over the last few months and may actually be approaching a breakup point.

ICON PLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ICON PLC has generated negative risk-adjusted returns adding no value to investors with long positions. Even with unsteady performance in the last few months, the Stock's essential indicators remain relatively invariable which may send shares a bit higher in December 2024. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Vivani Medical and ICON PLC

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

The idea behind Vivani Medical and ICON PLC 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.