Correlation Between Vivani Medical and Avid Bioservices

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

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

Diversification Opportunities for Vivani Medical and Avid Bioservices

0.51

Correlation Coefficient

Vivani Medical  Avid Bioservices

Very weak diversification

The 3 months correlation between Vivani and Avid is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Vivani Medical and Avid Bioservices in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Avid Bioservices 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 Avid Bioservices. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Avid Bioservices has no effect on the direction of Vivani Medical i.e., Vivani Medical and Avid Bioservices go up and down completely randomly.

Pair Corralation between Vivani Medical and Avid Bioservices

Given the investment horizon of 90 days Vivani Medical is expected to generate 4.15 times less return on investment than Avid Bioservices. In addition to that, Vivani Medical is 1.08 times more volatile than Avid Bioservices. It trades about 0.01 of its total potential returns per unit of risk. Avid Bioservices is currently generating about 0.07 per unit of volatility. If you would invest  1,116  in Avid Bioservices on September 13, 2024 and sell it today you would earn a total of  107.00  from holding Avid Bioservices or generate 9.59% return on investment over 90 days.

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

Vivani Medical  vs.  Avid Bioservices

Vivani Medical

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Vivani Medical are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. 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.

Avid Bioservices

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Avid Bioservices are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very weak primary indicators, Avid Bioservices may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Vivani Medical and Avid Bioservices

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

The idea behind Vivani Medical and Avid Bioservices 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.