Correlation Between Vivani Medical and Ikena Oncology

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

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

Diversification Opportunities for Vivani Medical and Ikena Oncology

0.29

Correlation Coefficient

Vivani Medical  Ikena Oncology

Modest diversification

The 3 months correlation between Vivani and Ikena is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Vivani Medical and Ikena Oncology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ikena Oncology 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 Ikena Oncology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ikena Oncology has no effect on the direction of Vivani Medical i.e., Vivani Medical and Ikena Oncology go up and down completely randomly.

Pair Corralation between Vivani Medical and Ikena Oncology

Given the investment horizon of 90 days Vivani Medical is expected to generate 1.31 times more return on investment than Ikena Oncology. However, Vivani Medical is 1.31 times more volatile than Ikena Oncology. It trades about 0.03 of its potential returns per unit of risk. Ikena Oncology is currently generating about 0.0 per unit of risk. If you would invest  126.00  in Vivani Medical on October 7, 2024 and sell it today you would earn a total of  2.00  from holding Vivani Medical or generate 1.59% return on investment over 90 days.

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

Vivani Medical  vs.  Ikena Oncology

Vivani Medical

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Vivani Medical are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak basic indicators, Vivani Medical demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Ikena Oncology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ikena Oncology has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Ikena Oncology is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Vivani Medical and Ikena Oncology

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

The idea behind Vivani Medical and Ikena Oncology 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.