Correlation Between Tivic Health and ICU Medical

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

Diversification Opportunities for Tivic Health and ICU Medical

-0.27

Correlation Coefficient

Tivic Health  ICU Medical

Very good diversification

The 3 months correlation between Tivic and ICU is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Tivic Health Systems and ICU Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ICU 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 ICU Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ICU Medical has no effect on the direction of Tivic Health i.e., Tivic Health and ICU Medical go up and down completely randomly.

Pair Corralation between Tivic Health and ICU Medical

Given the investment horizon of 90 days Tivic Health Systems is expected to under-perform the ICU Medical. In addition to that, Tivic Health is 5.45 times more volatile than ICU Medical. It trades about -0.01 of its total potential returns per unit of risk. ICU Medical is currently generating about -0.02 per unit of volatility. If you would invest  16,533  in ICU Medical on August 30, 2024 and sell it today you would lose (558.00) from holding ICU Medical or give up 3.38% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Tivic Health Systems  vs.  ICU Medical

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.

ICU Medical

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ICU Medical has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, ICU Medical is not utilizing all of its potentials. The newest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Tivic Health and ICU Medical

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

The idea behind Tivic Health Systems and ICU 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.