Correlation Between Laboratory and Vivos Therapeutics

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

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

Diversification Opportunities for Laboratory and Vivos Therapeutics

0.36

Correlation Coefficient

Laboratory  Vivos Therapeutics

Weak diversification

The 3 months correlation between Laboratory and Vivos is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Laboratory of and Vivos Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vivos Therapeutics and Laboratory 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 Laboratory of 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 Laboratory i.e., Laboratory and Vivos Therapeutics go up and down completely randomly.

Pair Corralation between Laboratory and Vivos Therapeutics

Allowing for the 90-day total investment horizon Laboratory is expected to generate 7.53 times less return on investment than Vivos Therapeutics. But when comparing it to its historical volatility, Laboratory of is 3.87 times less risky than Vivos Therapeutics. It trades about 0.12 of its potential returns per unit of risk. Vivos Therapeutics is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest  231.00  in Vivos Therapeutics on October 10, 2024 and sell it today you would earn a total of  206.00  from holding Vivos Therapeutics or generate 89.18% return on investment over 90 days.

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

Laboratory of  vs.  Vivos Therapeutics

Laboratory

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Laboratory of are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak technical indicators, Laboratory may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Vivos Therapeutics

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Vivos Therapeutics are ranked lower than 18 (%) 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 Laboratory and Vivos Therapeutics

The main advantage of trading using opposite Laboratory and Vivos Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Laboratory 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 Laboratory of 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.