Correlation Between Tivic Health and InspireMD

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

Diversification Opportunities for Tivic Health and InspireMD

-0.58

Correlation Coefficient

Tivic Health  InspireMD

Excellent diversification

The 3 months correlation between Tivic and InspireMD is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Tivic Health Systems and InspireMD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on InspireMD 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 InspireMD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of InspireMD has no effect on the direction of Tivic Health i.e., Tivic Health and InspireMD go up and down completely randomly.

Pair Corralation between Tivic Health and InspireMD

Given the investment horizon of 90 days Tivic Health Systems is expected to under-perform the InspireMD. In addition to that, Tivic Health is 2.02 times more volatile than InspireMD. It trades about -0.05 of its total potential returns per unit of risk. InspireMD is currently generating about 0.07 per unit of volatility. If you would invest  92.00  in InspireMD on September 23, 2024 and sell it today you would earn a total of  208.00  from holding InspireMD or generate 226.09% return on investment over 90 days.

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

Tivic Health Systems  vs.  InspireMD

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.

InspireMD

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in InspireMD are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Even with relatively fragile basic indicators, InspireMD may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Tivic Health and InspireMD

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

The idea behind Tivic Health Systems and InspireMD 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.