Correlation Between Tivic Health and Biomerica

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

Diversification Opportunities for Tivic Health and Biomerica

0.37

Correlation Coefficient

Tivic Health  Biomerica

Weak diversification

The 3 months correlation between Tivic and Biomerica is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Tivic Health Systems and Biomerica in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Biomerica 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 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 Tivic Health i.e., Tivic Health and Biomerica go up and down completely randomly.

Pair Corralation between Tivic Health and Biomerica

Given the investment horizon of 90 days Tivic Health is expected to generate 2.52 times less return on investment than Biomerica. In addition to that, Tivic Health is 1.65 times more volatile than Biomerica. It trades about 0.03 of its total potential returns per unit of risk. Biomerica is currently generating about 0.12 per unit of volatility. If you would invest  31.00  in Biomerica on December 29, 2024 and sell it today you would earn a total of  27.00  from holding Biomerica or generate 87.1% return on investment over 90 days.

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

Tivic Health Systems  vs.  Biomerica

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.

Biomerica

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Biomerica are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Biomerica sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Tivic Health and Biomerica

The main advantage of trading using opposite Tivic Health and Biomerica positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tivic Health 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 Tivic Health Systems 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.

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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..