Correlation Between Vivani Medical and Equillium

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

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

Diversification Opportunities for Vivani Medical and Equillium

-0.17

Correlation Coefficient

Vivani Medical  Equillium

Good diversification

The 3 months correlation between Vivani and Equillium is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Vivani Medical and Equillium in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Equillium 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 Equillium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Equillium has no effect on the direction of Vivani Medical i.e., Vivani Medical and Equillium go up and down completely randomly.

Pair Corralation between Vivani Medical and Equillium

Given the investment horizon of 90 days Vivani Medical is expected to generate 0.39 times more return on investment than Equillium. However, Vivani Medical is 2.55 times less risky than Equillium. It trades about 0.04 of its potential returns per unit of risk. Equillium is currently generating about 0.0 per unit of risk. If you would invest  124.00  in Vivani Medical on September 12, 2024 and sell it today you would earn a total of  5.00  from holding Vivani Medical or generate 4.03% return on investment over 90 days.

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

Vivani Medical  vs.  Equillium

Vivani Medical

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Vivani Medical are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak basic indicators, Vivani Medical may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Equillium

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Equillium has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Equillium is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Vivani Medical and Equillium

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

The idea behind Vivani Medical and Equillium 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.