Correlation Between Tivic Health and Bluejay Diagnostics

Can any of the company-specific risk be diversified away by investing in both Tivic Health and Bluejay Diagnostics 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 Bluejay Diagnostics 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 Bluejay Diagnostics, you can compare the effects of market volatilities on Tivic Health and Bluejay Diagnostics 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 Bluejay Diagnostics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tivic Health and Bluejay Diagnostics.

Diversification Opportunities for Tivic Health and Bluejay Diagnostics

0.21

Correlation Coefficient

Tivic Health  Bluejay Diagnostics

Modest diversification

The 3 months correlation between Tivic and Bluejay is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Tivic Health Systems and Bluejay Diagnostics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bluejay Diagnostics 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 Bluejay Diagnostics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bluejay Diagnostics has no effect on the direction of Tivic Health i.e., Tivic Health and Bluejay Diagnostics go up and down completely randomly.

Pair Corralation between Tivic Health and Bluejay Diagnostics

Given the investment horizon of 90 days Tivic Health Systems is expected to generate 0.69 times more return on investment than Bluejay Diagnostics. However, Tivic Health Systems is 1.45 times less risky than Bluejay Diagnostics. It trades about -0.01 of its potential returns per unit of risk. Bluejay Diagnostics is currently generating about -0.06 per unit of risk. If you would invest  33.00  in Tivic Health Systems on August 30, 2024 and sell it today you would lose (8.00) from holding Tivic Health Systems or give up 24.24% of portfolio value over 90 days.

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

Tivic Health Systems  vs.  Bluejay Diagnostics

Tivic Health Systems

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Tivic Health Systems has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Tivic Health is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Bluejay Diagnostics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bluejay Diagnostics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's fundamental indicators remain fairly strong which may send shares a bit higher in December 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Tivic Health and Bluejay Diagnostics

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

The idea behind Tivic Health Systems and Bluejay Diagnostics 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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.