Correlation Between Tivic Health and Penumbra

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

Diversification Opportunities for Tivic Health and Penumbra

0.19

Correlation Coefficient

Tivic Health  Penumbra

Average diversification

The 3 months correlation between Tivic and Penumbra is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Tivic Health Systems and Penumbra in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Penumbra 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 Penumbra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Penumbra has no effect on the direction of Tivic Health i.e., Tivic Health and Penumbra go up and down completely randomly.

Pair Corralation between Tivic Health and Penumbra

Given the investment horizon of 90 days Tivic Health Systems is expected to generate 10.07 times more return on investment than Penumbra. However, Tivic Health is 10.07 times more volatile than Penumbra. It trades about 0.03 of its potential returns per unit of risk. Penumbra is currently generating about 0.09 per unit of risk. If you would invest  520.00  in Tivic Health Systems on December 29, 2024 and sell it today you would lose (228.00) from holding Tivic Health Systems or give up 43.85% of portfolio value over 90 days.

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

Tivic Health Systems  vs.  Penumbra

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.

Penumbra

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Penumbra are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very weak technical and fundamental indicators, Penumbra displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Tivic Health and Penumbra

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

The idea behind Tivic Health Systems and Penumbra 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.