Correlation Between Icecure Medical and Tivic Health

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

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

Diversification Opportunities for Icecure Medical and Tivic Health

-0.05

Correlation Coefficient

Icecure Medical  Tivic Health

Good diversification

The 3 months correlation between Icecure and Tivic is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Icecure Medical and Tivic Health Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tivic Health Systems and Icecure 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 Icecure Medical are associated (or correlated) with Tivic Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tivic Health Systems has no effect on the direction of Icecure Medical i.e., Icecure Medical and Tivic Health go up and down completely randomly.

Pair Corralation between Icecure Medical and Tivic Health

Given the investment horizon of 90 days Icecure Medical is expected to generate 0.96 times more return on investment than Tivic Health. However, Icecure Medical is 1.05 times less risky than Tivic Health. It trades about 0.03 of its potential returns per unit of risk. Tivic Health Systems is currently generating about -0.05 per unit of risk. If you would invest  103.00  in Icecure Medical on September 2, 2024 and sell it today you would lose (20.00) from holding Icecure Medical or give up 19.42% of portfolio value over 90 days.

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

Icecure Medical  vs.  Tivic Health Systems

Icecure Medical

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Icecure Medical are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile fundamental indicators, Icecure Medical displayed solid returns over the last few months and may actually be approaching a breakup point.

Tivic Health Systems

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Icecure Medical and Tivic Health

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

The idea behind Icecure Medical and Tivic Health Systems 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.