Correlation Between Tenon Medical and Vivos Therapeutics

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

By analyzing existing cross correlation between Tenon Medical and Vivos Therapeutics, you can compare the effects of market volatilities on Tenon Medical and Vivos Therapeutics 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 Vivos Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tenon Medical and Vivos Therapeutics.

Diversification Opportunities for Tenon Medical and Vivos Therapeutics

-0.03

Correlation Coefficient

Tenon Medical  Vivos Therapeutics

Good diversification

The 3 months correlation between Tenon and Vivos is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Tenon Medical and Vivos Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vivos Therapeutics 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 Vivos Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vivos Therapeutics has no effect on the direction of Tenon Medical i.e., Tenon Medical and Vivos Therapeutics go up and down completely randomly.

Pair Corralation between Tenon Medical and Vivos Therapeutics

Given the investment horizon of 90 days Tenon Medical is expected to generate 15.43 times less return on investment than Vivos Therapeutics. In addition to that, Tenon Medical is 1.79 times more volatile than Vivos Therapeutics. It trades about 0.0 of its total potential returns per unit of risk. Vivos Therapeutics is currently generating about 0.09 per unit of volatility. If you would invest  261.00  in Vivos Therapeutics on September 2, 2024 and sell it today you would earn a total of  80.00  from holding Vivos Therapeutics or generate 30.65% return on investment over 90 days.

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

Tenon Medical  vs.  Vivos Therapeutics

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 very healthy basic indicators, Tenon Medical is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Vivos Therapeutics

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Vivos Therapeutics are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, Vivos Therapeutics unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Tenon Medical and Vivos Therapeutics

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

The idea behind Tenon Medical and Vivos Therapeutics 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.