Correlation Between Vivani Medical and Bicycle Therapeutics

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

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

Diversification Opportunities for Vivani Medical and Bicycle Therapeutics

0.83

Correlation Coefficient

Vivani Medical  Bicycle Therapeutics

Very poor diversification

The 3 months correlation between Vivani and Bicycle is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Vivani Medical and Bicycle Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bicycle Therapeutics and Vivani 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 Vivani Medical are associated (or correlated) with Bicycle Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bicycle Therapeutics has no effect on the direction of Vivani Medical i.e., Vivani Medical and Bicycle Therapeutics go up and down completely randomly.

Pair Corralation between Vivani Medical and Bicycle Therapeutics

Given the investment horizon of 90 days Vivani Medical is expected to generate 0.53 times more return on investment than Bicycle Therapeutics. However, Vivani Medical is 1.87 times less risky than Bicycle Therapeutics. It trades about -0.04 of its potential returns per unit of risk. Bicycle Therapeutics is currently generating about -0.19 per unit of risk. If you would invest  118.00  in Vivani Medical on December 28, 2024 and sell it today you would lose (7.00) from holding Vivani Medical or give up 5.93% of portfolio value over 90 days.

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

Vivani Medical  vs.  Bicycle Therapeutics

Vivani Medical

Risk-Adjusted Performance

Very Weak

Over the last 90 days Vivani Medical has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Vivani Medical is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Bicycle Therapeutics

Risk-Adjusted Performance

Very Weak

Over the last 90 days Bicycle Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Vivani Medical and Bicycle Therapeutics

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

The idea behind Vivani Medical and Bicycle 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.

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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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.