Correlation Between CONMED and Vivos Therapeutics

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

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

Diversification Opportunities for CONMED and Vivos Therapeutics

0.16

Correlation Coefficient

CONMED  Vivos Therapeutics

Average diversification

The 3 months correlation between CONMED and Vivos is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding CONMED and Vivos Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vivos Therapeutics and CONMED 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 CONMED are associated (or correlated) with Vivos Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vivos Therapeutics has no effect on the direction of CONMED i.e., CONMED and Vivos Therapeutics go up and down completely randomly.

Pair Corralation between CONMED and Vivos Therapeutics

Given the investment horizon of 90 days CONMED is expected to under-perform the Vivos Therapeutics. But the stock apears to be less risky and, when comparing its historical volatility, CONMED is 5.05 times less risky than Vivos Therapeutics. The stock trades about -0.09 of its potential returns per unit of risk. The Vivos Therapeutics is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  512.00  in Vivos Therapeutics on October 22, 2024 and sell it today you would earn a total of  62.00  from holding Vivos Therapeutics or generate 12.11% return on investment over 90 days.

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

CONMED  vs.  Vivos Therapeutics

CONMED

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in CONMED are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak primary indicators, CONMED may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Vivos Therapeutics

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Vivos Therapeutics are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, Vivos Therapeutics unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CONMED and Vivos Therapeutics

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

The idea behind CONMED and Vivos 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.