Correlation Between Heart Test and Vivos Therapeutics

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

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

Diversification Opportunities for Heart Test and Vivos Therapeutics

0.3

Correlation Coefficient

Heart Test  Vivos Therapeutics

Weak diversification

The 3 months correlation between Heart and Vivos is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Heart Test Laboratories and Vivos Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vivos Therapeutics and Heart Test 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 Heart Test Laboratories 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 Heart Test i.e., Heart Test and Vivos Therapeutics go up and down completely randomly.

Pair Corralation between Heart Test and Vivos Therapeutics

Given the investment horizon of 90 days Heart Test Laboratories is expected to generate 0.62 times more return on investment than Vivos Therapeutics. However, Heart Test Laboratories is 1.63 times less risky than Vivos Therapeutics. It trades about -0.09 of its potential returns per unit of risk. Vivos Therapeutics is currently generating about -0.06 per unit of risk. If you would invest  372.00  in Heart Test Laboratories on December 28, 2024 and sell it today you would lose (81.00) from holding Heart Test Laboratories or give up 21.77% of portfolio value over 90 days.

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

Heart Test Laboratories  vs.  Vivos Therapeutics

Heart Test Laboratories

Risk-Adjusted Performance

Very Weak

Over the last 90 days Heart Test Laboratories has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's fundamental indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Vivos Therapeutics

Risk-Adjusted Performance

Very Weak

Over the last 90 days Vivos Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Heart Test and Vivos Therapeutics

The main advantage of trading using opposite Heart Test and Vivos Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Heart Test 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 Heart Test Laboratories 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.

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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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.