Correlation Between EnVVeno Medical and Biomerica

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

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

Diversification Opportunities for EnVVeno Medical and Biomerica

0.25

Correlation Coefficient

EnVVeno Medical  Biomerica

Modest diversification

The 3 months correlation between EnVVeno and Biomerica is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding enVVeno Medical Corp and Biomerica in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Biomerica and EnVVeno 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 enVVeno Medical Corp are associated (or correlated) with Biomerica. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Biomerica has no effect on the direction of EnVVeno Medical i.e., EnVVeno Medical and Biomerica go up and down completely randomly.

Pair Corralation between EnVVeno Medical and Biomerica

Given the investment horizon of 90 days enVVeno Medical Corp is expected to under-perform the Biomerica. But the stock apears to be less risky and, when comparing its historical volatility, enVVeno Medical Corp is 1.36 times less risky than Biomerica. The stock trades about -0.15 of its potential returns per unit of risk. The Biomerica is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  43.00  in Biomerica on September 2, 2024 and sell it today you would lose (4.00) from holding Biomerica or give up 9.3% of portfolio value over 90 days.

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

enVVeno Medical Corp  vs.  Biomerica

enVVeno Medical Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days enVVeno Medical Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Biomerica

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Biomerica has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Biomerica is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with EnVVeno Medical and Biomerica

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

The idea behind enVVeno Medical Corp and Biomerica 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.