Correlation Between Orthofix Medical and Tivic Health

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

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

Diversification Opportunities for Orthofix Medical and Tivic Health

0.39

Correlation Coefficient

Orthofix Medical  Tivic Health

Weak diversification

The 3 months correlation between Orthofix and Tivic is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Orthofix Medical 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 Orthofix 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 Orthofix Medical 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 Orthofix Medical i.e., Orthofix Medical and Tivic Health go up and down completely randomly.

Pair Corralation between Orthofix Medical and Tivic Health

Given the investment horizon of 90 days Orthofix Medical is expected to under-perform the Tivic Health. But the stock apears to be less risky and, when comparing its historical volatility, Orthofix Medical is 17.69 times less risky than Tivic Health. The stock trades about -0.08 of its potential returns per unit of risk. The Tivic Health Systems is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  520.00  in Tivic Health Systems on December 29, 2024 and sell it today you would lose (228.00) from holding Tivic Health Systems or give up 43.85% of portfolio value over 90 days.

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

Orthofix Medical  vs.  Tivic Health Systems

Orthofix Medical

Risk-Adjusted Performance

Very Weak

Over the last 90 days Orthofix Medical has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's forward indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Tivic Health Systems

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Tivic Health Systems are ranked lower than 2 (%) 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 Orthofix Medical and Tivic Health

The main advantage of trading using opposite Orthofix Medical and Tivic Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Orthofix Medical 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 Orthofix Medical 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.