Correlation Between InspireMD and Vivos Therapeutics

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

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

Diversification Opportunities for InspireMD and Vivos Therapeutics

0.7

Correlation Coefficient

InspireMD  Vivos Therapeutics

Poor diversification

The 3 months correlation between InspireMD and Vivos is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding InspireMD and Vivos Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vivos Therapeutics 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 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 InspireMD i.e., InspireMD and Vivos Therapeutics go up and down completely randomly.

Pair Corralation between InspireMD and Vivos Therapeutics

Given the investment horizon of 90 days InspireMD is expected to under-perform the Vivos Therapeutics. But the stock apears to be less risky and, when comparing its historical volatility, InspireMD is 1.68 times less risky than Vivos Therapeutics. The stock trades about -0.29 of its potential returns per unit of risk. The Vivos Therapeutics is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest  461.00  in Vivos Therapeutics on October 10, 2024 and sell it today you would lose (26.00) from holding Vivos Therapeutics or give up 5.64% of portfolio value over 90 days.

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

InspireMD  vs.  Vivos Therapeutics

InspireMD

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in InspireMD are ranked lower than 3 (%) 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.

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 InspireMD and Vivos Therapeutics

The main advantage of trading using opposite InspireMD and Vivos Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if InspireMD 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 InspireMD 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.