Correlation Between Assembly Biosciences and Vivani Medical

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

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

Diversification Opportunities for Assembly Biosciences and Vivani Medical

0.88

Correlation Coefficient

Assembly Biosciences  Vivani Medical

Very poor diversification

The 3 months correlation between Assembly and Vivani is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Assembly Biosciences and Vivani Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vivani Medical and Assembly Biosciences 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 Assembly Biosciences are associated (or correlated) with Vivani Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vivani Medical has no effect on the direction of Assembly Biosciences i.e., Assembly Biosciences and Vivani Medical go up and down completely randomly.

Pair Corralation between Assembly Biosciences and Vivani Medical

Given the investment horizon of 90 days Assembly Biosciences is expected to under-perform the Vivani Medical. In addition to that, Assembly Biosciences is 1.85 times more volatile than Vivani Medical. It trades about -0.17 of its total potential returns per unit of risk. Vivani Medical is currently generating about -0.01 per unit of volatility. If you would invest  118.00  in Vivani Medical on December 29, 2024 and sell it today you would lose (3.00) from holding Vivani Medical or give up 2.54% of portfolio value over 90 days.

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

Assembly Biosciences  vs.  Vivani Medical

Assembly Biosciences

Risk-Adjusted Performance

Very Weak

Over the last 90 days Assembly Biosciences has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's primary indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Vivani Medical

Risk-Adjusted Performance

Very Weak

Over the last 90 days Vivani Medical has generated negative risk-adjusted returns adding no value to investors with long positions. 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.

Pair Trading with Assembly Biosciences and Vivani Medical

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

The idea behind Assembly Biosciences and Vivani 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.