Correlation Between Tenon Medical and Sharps Technology

Can any of the company-specific risk be diversified away by investing in both Tenon Medical and Sharps Technology 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 Tenon Medical and Sharps Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Tenon Medical and Sharps Technology Warrant, you can compare the effects of market volatilities on Tenon Medical and Sharps Technology 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 Tenon Medical with a short position of Sharps Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tenon Medical and Sharps Technology.

Diversification Opportunities for Tenon Medical and Sharps Technology

0.76

Correlation Coefficient

Tenon Medical  Sharps Technology

Poor diversification

The 3 months correlation between Tenon and Sharps is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Tenon Medical and Sharps Technology Warrant in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sharps Technology Warrant and Tenon Medical 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 Tenon Medical are associated (or correlated) with Sharps Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sharps Technology Warrant has no effect on the direction of Tenon Medical i.e., Tenon Medical and Sharps Technology go up and down completely randomly.

Pair Corralation between Tenon Medical and Sharps Technology

Given the investment horizon of 90 days Tenon Medical is expected to under-perform the Sharps Technology. But the stock apears to be less risky and, when comparing its historical volatility, Tenon Medical is 8.41 times less risky than Sharps Technology. The stock trades about -0.03 of its potential returns per unit of risk. The Sharps Technology Warrant is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  15.00  in Sharps Technology Warrant on September 15, 2024 and sell it today you would lose (11.28) from holding Sharps Technology Warrant or give up 75.2% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	70.71%
Values	Daily Returns

Tenon Medical  vs.  Sharps Technology Warrant

Tenon Medical

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Tenon Medical has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Sharps Technology Warrant

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sharps Technology Warrant has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly uncertain basic indicators, Sharps Technology may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Tenon Medical and Sharps Technology

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

The idea behind Tenon Medical and Sharps Technology Warrant 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..