Correlation Between Vivos Therapeutics and Nihon Kohden

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

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

Diversification Opportunities for Vivos Therapeutics and Nihon Kohden

-0.28

Correlation Coefficient

Vivos Therapeutics  Nihon Kohden

Very good diversification

The 3 months correlation between Vivos and Nihon is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Vivos Therapeutics and Nihon Kohden Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nihon Kohden Corp and Vivos Therapeutics 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 Vivos Therapeutics are associated (or correlated) with Nihon Kohden. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nihon Kohden Corp has no effect on the direction of Vivos Therapeutics i.e., Vivos Therapeutics and Nihon Kohden go up and down completely randomly.

Pair Corralation between Vivos Therapeutics and Nihon Kohden

Given the investment horizon of 90 days Vivos Therapeutics is expected to generate 0.96 times more return on investment than Nihon Kohden. However, Vivos Therapeutics is 1.05 times less risky than Nihon Kohden. It trades about 0.21 of its potential returns per unit of risk. Nihon Kohden Corp is currently generating about -0.01 per unit of risk. If you would invest  261.00  in Vivos Therapeutics on September 30, 2024 and sell it today you would earn a total of  204.00  from holding Vivos Therapeutics or generate 78.16% return on investment over 90 days.

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

Vivos Therapeutics  vs.  Nihon Kohden Corp

Vivos Therapeutics

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Vivos Therapeutics are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively inconsistent basic indicators, Vivos Therapeutics unveiled solid returns over the last few months and may actually be approaching a breakup point.

Nihon Kohden Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nihon Kohden Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong forward-looking signals, Nihon Kohden is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Vivos Therapeutics and Nihon Kohden

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

The idea behind Vivos Therapeutics and Nihon Kohden Corp 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.