Correlation Between Vivani Medical and Tenaya Therapeutics

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

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

Diversification Opportunities for Vivani Medical and Tenaya Therapeutics

0.59

Correlation Coefficient

Vivani Medical  Tenaya Therapeutics

Very weak diversification

The 3 months correlation between Vivani and Tenaya is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Vivani Medical and Tenaya Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tenaya Therapeutics 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 Tenaya Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tenaya Therapeutics has no effect on the direction of Vivani Medical i.e., Vivani Medical and Tenaya Therapeutics go up and down completely randomly.

Pair Corralation between Vivani Medical and Tenaya Therapeutics

Given the investment horizon of 90 days Vivani Medical is expected to generate 10.98 times less return on investment than Tenaya Therapeutics. But when comparing it to its historical volatility, Vivani Medical is 2.5 times less risky than Tenaya Therapeutics. It trades about 0.04 of its potential returns per unit of risk. Tenaya Therapeutics is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  206.00  in Tenaya Therapeutics on September 12, 2024 and sell it today you would earn a total of  160.00  from holding Tenaya Therapeutics or generate 77.67% return on investment over 90 days.

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

Vivani Medical  vs.  Tenaya Therapeutics

Vivani Medical

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Vivani Medical are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak basic indicators, Vivani Medical may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Tenaya Therapeutics

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Tenaya Therapeutics are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unsteady basic indicators, Tenaya Therapeutics sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Vivani Medical and Tenaya Therapeutics

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

The idea behind Vivani Medical and Tenaya Therapeutics 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.