Correlation Between Viveve Medical and Aethlon Medical

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

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

Diversification Opportunities for Viveve Medical and Aethlon Medical

-0.33

Correlation Coefficient

Viveve Medical  Aethlon Medical

Very good diversification

The 3 months correlation between Viveve and Aethlon is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Viveve Medical and Aethlon Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aethlon Medical and Viveve 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 Viveve Medical are associated (or correlated) with Aethlon Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aethlon Medical has no effect on the direction of Viveve Medical i.e., Viveve Medical and Aethlon Medical go up and down completely randomly.

Pair Corralation between Viveve Medical and Aethlon Medical

Given the investment horizon of 90 days Viveve Medical is expected to under-perform the Aethlon Medical. In addition to that, Viveve Medical is 2.51 times more volatile than Aethlon Medical. It trades about -0.28 of its total potential returns per unit of risk. Aethlon Medical is currently generating about -0.01 per unit of volatility. If you would invest  443.00  in Aethlon Medical on September 30, 2024 and sell it today you would lose (382.00) from holding Aethlon Medical or give up 86.23% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	4.63%
Values	Daily Returns

Viveve Medical  vs.  Aethlon Medical

Viveve Medical

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Viveve Medical has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Viveve Medical is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Aethlon Medical

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Aethlon Medical are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather inconsistent primary indicators, Aethlon Medical exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Viveve Medical and Aethlon Medical

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

The idea behind Viveve Medical and Aethlon Medical 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.