Correlation Between Vivani Medical and Revelation Biosciences

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

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

Diversification Opportunities for Vivani Medical and Revelation Biosciences

-0.23

Correlation Coefficient

Vivani Medical  Revelation Biosciences

Very good diversification

The 3 months correlation between Vivani and Revelation is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Vivani Medical and Revelation Biosciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Revelation Biosciences 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 Revelation Biosciences. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Revelation Biosciences has no effect on the direction of Vivani Medical i.e., Vivani Medical and Revelation Biosciences go up and down completely randomly.

Pair Corralation between Vivani Medical and Revelation Biosciences

Given the investment horizon of 90 days Vivani Medical is expected to generate 7.08 times less return on investment than Revelation Biosciences. But when comparing it to its historical volatility, Vivani Medical is 2.81 times less risky than Revelation Biosciences. It trades about 0.01 of its potential returns per unit of risk. Revelation Biosciences is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  1.23  in Revelation Biosciences on September 13, 2024 and sell it today you would lose (0.03) from holding Revelation Biosciences or give up 2.44% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

Vivani Medical  vs.  Revelation Biosciences

Vivani Medical

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Vivani Medical are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong basic indicators, Vivani Medical is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Revelation Biosciences

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Revelation Biosciences are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly inconsistent fundamental drivers, Revelation Biosciences showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Vivani Medical and Revelation Biosciences

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

The idea behind Vivani Medical and Revelation Biosciences 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.