Correlation Between Tivic Health and Avanos Medical

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

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

Diversification Opportunities for Tivic Health and Avanos Medical

0.22

Correlation Coefficient

Tivic Health  Avanos Medical

Modest diversification

The 3 months correlation between Tivic and Avanos is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Tivic Health Systems and Avanos Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Avanos Medical and Tivic Health 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 Tivic Health Systems are associated (or correlated) with Avanos Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Avanos Medical has no effect on the direction of Tivic Health i.e., Tivic Health and Avanos Medical go up and down completely randomly.

Pair Corralation between Tivic Health and Avanos Medical

Given the investment horizon of 90 days Tivic Health Systems is expected to generate 14.02 times more return on investment than Avanos Medical. However, Tivic Health is 14.02 times more volatile than Avanos Medical. It trades about 0.02 of its potential returns per unit of risk. Avanos Medical is currently generating about -0.06 per unit of risk. If you would invest  520.00  in Tivic Health Systems on December 28, 2024 and sell it today you would lose (247.00) from holding Tivic Health Systems or give up 47.5% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.36%
Values	Daily Returns

Tivic Health Systems  vs.  Avanos Medical

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 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, Tivic Health exhibited solid returns over the last few months and may actually be approaching a breakup point.

Avanos Medical

Risk-Adjusted Performance

Very Weak

Over the last 90 days Avanos Medical has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Tivic Health and Avanos Medical

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

The idea behind Tivic Health Systems and Avanos 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.