Correlation Between Tivic Health and Rapid Micro

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

Diversification Opportunities for Tivic Health and Rapid Micro

0.25

Correlation Coefficient

Tivic Health  Rapid Micro

Modest diversification

The 3 months correlation between Tivic and Rapid is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Tivic Health Systems and Rapid Micro Biosystems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rapid Micro Biosystems 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 Rapid Micro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rapid Micro Biosystems has no effect on the direction of Tivic Health i.e., Tivic Health and Rapid Micro go up and down completely randomly.

Pair Corralation between Tivic Health and Rapid Micro

Given the investment horizon of 90 days Tivic Health Systems is expected to under-perform the Rapid Micro. In addition to that, Tivic Health is 2.75 times more volatile than Rapid Micro Biosystems. It trades about -0.05 of its total potential returns per unit of risk. Rapid Micro Biosystems is currently generating about 0.0 per unit of volatility. If you would invest  138.00  in Rapid Micro Biosystems on September 3, 2024 and sell it today you would lose (38.00) from holding Rapid Micro Biosystems or give up 27.54% 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.  Rapid Micro Biosystems

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.

Rapid Micro Biosystems

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Rapid Micro Biosystems are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain forward indicators, Rapid Micro exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Tivic Health and Rapid Micro

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

The idea behind Tivic Health Systems and Rapid Micro Biosystems 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.