Correlation Between Ocular Therapeutix and Vivani Medical

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

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

Diversification Opportunities for Ocular Therapeutix and Vivani Medical

0.19

Correlation Coefficient

Ocular Therapeutix  Vivani Medical

Average diversification

The 3 months correlation between Ocular and Vivani is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Ocular Therapeutix and Vivani Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vivani Medical and Ocular Therapeutix 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 Ocular Therapeutix are associated (or correlated) with Vivani Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vivani Medical has no effect on the direction of Ocular Therapeutix i.e., Ocular Therapeutix and Vivani Medical go up and down completely randomly.

Pair Corralation between Ocular Therapeutix and Vivani Medical

Given the investment horizon of 90 days Ocular Therapeutix is expected to under-perform the Vivani Medical. But the stock apears to be less risky and, when comparing its historical volatility, Ocular Therapeutix is 1.04 times less risky than Vivani Medical. The stock trades about -0.15 of its potential returns per unit of risk. The Vivani Medical is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  126.00  in Vivani Medical on October 7, 2024 and sell it today you would earn a total of  2.00  from holding Vivani Medical or generate 1.59% return on investment over 90 days.

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

Ocular Therapeutix  vs.  Vivani Medical

Ocular Therapeutix

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ocular Therapeutix has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Ocular Therapeutix is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Vivani Medical

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Vivani Medical are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak basic indicators, Vivani Medical demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ocular Therapeutix and Vivani Medical

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

The idea behind Ocular Therapeutix and Vivani Medical 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.