Correlation Between InspireMD and Tivic Health

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

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

Diversification Opportunities for InspireMD and Tivic Health

-0.49

Correlation Coefficient

InspireMD  Tivic Health

Very good diversification

The 3 months correlation between InspireMD and Tivic is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding InspireMD 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 InspireMD 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 InspireMD 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 InspireMD i.e., InspireMD and Tivic Health go up and down completely randomly.

Pair Corralation between InspireMD and Tivic Health

Given the investment horizon of 90 days InspireMD is expected to generate 2.77 times less return on investment than Tivic Health. But when comparing it to its historical volatility, InspireMD is 3.18 times less risky than Tivic Health. It trades about 0.04 of its potential returns per unit of risk. Tivic Health Systems is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  34.00  in Tivic Health Systems on October 20, 2024 and sell it today you would lose (5.00) from holding Tivic Health Systems or give up 14.71% of portfolio value over 90 days.

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

InspireMD  vs.  Tivic Health Systems

InspireMD

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in InspireMD are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Even with relatively fragile basic indicators, InspireMD may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Tivic Health Systems

Risk-Adjusted Performance

3 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Tivic Health Systems are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain basic indicators, Tivic Health exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with InspireMD and Tivic Health

The main advantage of trading using opposite InspireMD and Tivic Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if InspireMD 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 InspireMD 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.

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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.